Short term trades in the stock market •$$$$$•

[SpasticGramps]

Bernanke is dropping bombs on the Swiss. I bet the Japanese are going to have to intervene too. The dollar is tanking. Hot potato. Hot potato.

Swiss Ponder Battle Over Runaway Franc Bloomberg

Switzerland, the nation that hasn’t gone to war with a foreign power since Napoleon, is reluctantly debating a generational taboo: ceding monetary independence to win a battle over its runaway currency.
Swiss National Bank Vice President Thomas Jordan said the central bank is assessing “a whole range of options” to prevent the franc, which reached a record against the euro this month, from making Swiss goods prohibitively expensive. Even a cup of coffee at Café St. Gotthard in Zurich costs $8.30, with one Swiss franc buying $1.2750 at today’s exchange rate.
Billionaire entrepreneur Christoph Blocher, one of the politicians who called on SNB President Philipp Hildebrand to resign after the bank lost $21 billion last year in a vain attempt to restrain the currency, now supports a franc target.
“The franc is catastrophically overvalued,” said Blocher, a former justice minister for the People’s Party, Switzerland’s largest. “It’s almost like economic warfare -- to wage a war, you must use all measures at your disposal, and you must win.”

I read somewhere that a Big Mac was ~$18 in Switzerland now. Racing to the bottom rounding turn two. Like I said. Financial warfare. In my signature Einstein ponders what weapons WWIII will be fought with. I believe I have his answer. Credit derivatives and printing presses.

 

[SpasticGramps]

Interesting albeit long take.

“The Sequel”: How 2011 Is A Repeat of 2008—Only Bigger, Longer, and Uncut by Bailouts

I might have missed it, but I don’t think anyone has noticed this simple truism:

The structural causes that led to the Global Financial Crisis of 2008 are identical to the structural causes that are leading us to another systemic financial crisis in 2011.

The only difference is the kind of debt at the core of the looming crisis: Mortgage-backed securities in 2008, as opposed to European sovereign debt in 2011.

And of course, the debt hole in 2011 is bigger than in 2008—a lot bigger.

That’s why I am confident in predicting we are about to have another Global Financial Crisis—I’m calling it The Sequel: Same movie, same players, same story. Only this time around—like all good sequels—the financial crisis we are about to experience is going to be bigger, longer, and uncut by bailouts.

By the way, that is the key difference between 2008 and 2011: We’re not going to have a Hollywood Ending this time around. The governments of Europe and the United States, as well as their respective central banks, do not have any weapons to fight off this 2011 financial crisis, as they did in 2008, for the simple reason that they used them all up—they’re out of bullets, both monetarily and politically.

So when The Sequel hits the big screen, there won’t be a Big Daddy Government deus ex machina to come save the day in the third act twist. When The Sequel hits, we’re on our own.

Let’s discuss the structural similarities between the original and The Sequel:

In both 2008 and now 2011, you had unpayable debts at the center of a fragile financial system. In 2008, it was mortgage backed securities and collateralized debt obligations—the so-called “toxic assets”. I think we all know that story pretty well.

In 2011, we have European sovereign debt. And just like the toxic assets of 2008, the Euro-bonds might have been rated AAA, but they certainly aren’t blue-chip—they are more like brown-chip: That deep brown color peculiar to fast-sinking dog-turds.

In both 2008 and 2011, these unpayable debts—emitted over many years, accumulating silently and asymptomatically like plaque in the arteries—gave a false sense of prosperity in the years leading up to the respective crises.

In the lead up to 2008, the MBS’s and CDO’s gave the American homeowner a sense that their house was their personal private ATM sitting on their quarter-acre suburban lot. They also were a profit spigot for the financial sector, which bouyed the U.S. GDP growth, leading to a false sense of national prosperity, even as there were signs that the non-financial sector of the economy was diving.

In the lead up to 2011, on the other hand, the sovereign debt of the eurozone countries gave the European citizens a sense that they could afford to buy all the imported goods they could ever want, as well as the sense that their government could afford to pay for all the social welfare programs they were all promised—without having to pay for any of this by way of higher taxes. Hell, that was the entire Labour governments’ platform between 1997 and 2010: Blair and Brown gave the UK a welfare state and low taxes—all paid for with sovereign debt.

In both 2008 and 2011, you have banks exposed to these bad debts both directly and indirectly—and this exposure in 2011 threatens to topple the entire financial structure, just as it almost did in 2008.

In 2008, the financial institutions with direct exposure to the toxic assets—that is, the institutions that actually owned these crap bonds that would never be paid in full—were mostly American banks. Their capitalization depended on how pristine these toxic assets were. As it became increasingly clear that the toxic assets were exactly that—toxic—the banks holding this crap found themselves not only without the capitalization to pass regulatory muster, but in fact found themselves functionally insolvent—hence the suspension of FASB 157, coupled with the injection of $150 billion worth of capital by way of TARP.

In 2011, the financial institutions with direct exposure to toxic assets—in this case, the European sovereign bonds, especially from the PIIGS—are once again banks, this time around mostly European banks: UniCredit, Société Générale, Dexia.

Like 2008, these assets might be rated triple-A, but they’re dog-turds—and they threaten these banks with insolvency, if any of them default. A bankruptcy of any of the aforementioned European banks would have massive consequences for the rest of the global financial construct—it would not be a Europe-only problem, just as the bankruptcy of Lehman was most definitely not an America-only catastrophe.

And that’s just the direct exposure to the 2011 version of toxic assets.

The real danger in 2011 is the indirect exposure—that is, the liabilities that are triggered in the case of a debt default: Just like 2008.

In 2008, it was AIG and other assorted credit default swap sellers that got hit bad, when the toxic assets began to default—we all remember how the very ground we trod rocked as AIG stumbled and everybody had a collective nuclear-meltdown freak-out.

In 2011—you guessed it—it’s worse: We have Bank of America for sure has massive exposure to derivatives on European sovereign and debt, as well as . . . God Knows who else.

Why do I say “God Knows who else”? Because just like in 2008, the derivatives market is so opaque—not to say hermetic—that we are not going to know who’s going to go bust until it actually happens. In 2008, Hank Paulson and the Treasury Department didn’t find out about the AIG hole until the weekend before the company would go bust. Today, in 2011—even with the experience of how potentially deadly ignorance of the derivatives markets can be—there are no mechanisms in place to swiftly and accurately tally who has derivatives exposure to any particular bond or asset.

In other words, Tiny Timmy and Bailout Benny never implemented the one lesson learned from 2008: Make the markets transparent, so that you can see where the crisis is coming from before it falls on top of your head.

Thus they—and we collectively—are flying blind insofar as derivatives written on the European sovereign debt. We only know about BofA’s massive CDS exposure indirectly, through Timothy Geithner’s demand in December 2010 that Ireland not default, because of the massive losses an Irish sovereign default on BofA.

Bernanke and Geithner had the chance to regulate this vital piece of the financial markets—but they didn’t! Instead, they acquiesced to this ridiculous pseudo-“ideology” that we should not regulate the financial markets.

(Parenthetically, and speaking as a hard-core, anti-choice, anti-vegan, pro-gun, pro-red meat Conservative: I am sick and tired of the ignorant assholes who say, “All government regulation is bad! Let the free markets reign!” We have the government regulate various industries and products because it is necessary for our individual and collective safety—or would you rather the government never regulated, say, the water supply, car safety standards, housing standards? Would you prefer it if the FDIC ceased to exist, and your local S&L could go to Vegas and play the roulette wheel with your life savings? Certainly not. Not only do we need government regulation for safety standards, we need regulations to prevent unscrupulous exploiters from gaming the system—think Enron, which should have put paid to any ridiculous notion that “the market knows best”, but obviously hasn’t (or else I wouldn’t be ranting here): The Enronites of the “energy trading desks” exploited the free markets and the lack of government regulation in the so-called “energy markets”, and deliberately created rolling blackouts in California so as to gouge the people of that state for the electricity they already owned and which they should have been getting, but which the Enron bastards were manipulating in order to squeeze them for money. Insofar as the financial markets are concerned, anyone spouting that particular bullshit spiel about the markets knowing best is either a shill for the banks, or a complete and utter imbecile. And a bank shill at least has the excuse of needing to pay the mortgage in exchange for spouting this nonsensical bullshit—the imbecile does not.)

Now, I used to write for the movies—I can tell you the secret to writing a good sequel: Use the exact same elements, the exact same story structure—hell, even use the exact same lines!—but make sure the sequel is bigger: Bigger sets, bigger explosions, bigger stars, bigger everything—a bigger bang for the buck.

2011’s The Sequel is certainly going to deliver that bigger bang—because it’s a lot bigger than 2008: The total sovereign debt of the PIIGS is about €3.1 trillion. That’s 20% of the eurozone’s GDP—just the PIIGS, just those five, forget about France, Belgium and the UK, which if added up easily doubles that €3.1 trillion figure.

Compare that to 2008, when the total toxic assets the Federal Reserve wound up having to buy amounted to about $1.5 trillion—about 11.5% of the U.S.’s 2008 GDP.

In other words, the current situation is over twice what 2008 was—and might wind up being four times the 2008 price tag. And that’s just the nominal value of the toxic debt at the core of the current situation. We have no idea what the total value of the indirect exposure via derivatives is going to add up to.

So! We’ve seen that we’re structurally at the same place we were in 2008: Unpayable debts held by a fragile financial sector, with massive indirect exposure by way of derivatives that no one has bothered to tally up and regulate.

We have furthermore seen that—like all good sequels—2011 is going to have a bigger bang: We currently have more debts on deck than in 2008, at least twice as much, as a matter of fact.

Question: Why does teasing out these similarities matter?

Answer: Because it will allow us to see what will happen over the months of September and October, when the crisis breaks.

What we’ve seen over the last couple of weeks is not the crisis—or not the crisis, at any rate. We’ve seen Italian and Spanish debt drop, their yields spiking—we’ve seen gold run up to $1,820—we’ve seen the biggest drops in the US equities markets since 2008—

—but these gyrations are not The Sequel. Rather, these last couple of weeks of market gyrations have been the forewarnings—the pre-tremors. Anyone who’s lived in earthquake country knows about them: The little tremors and hiccoughs that precede The Big One.

The Sequel will actually get going once we have our Lehman-like event.

In 2008, the bankruptcy of Lehman Brothers triggered the crash—but it was not the cause of the Global Financial Crisis of 2008: The structural weaknesses were already baked into the situation—the Lehman bankruptcy was just the shove the global financial system needed to fall off the proverbial cliff.

Today, we are waiting for the Lehman-like event. My personal guess is Dexia will be the first to go under, the Lehman-like event that will trigger The Sequel—but that’s just a guess. More likely than not, the Lehman-like event of 2011 will catch us all by surprise—but just like the Lehman bankruptcy, it won’t matter intrinsically: It’ll only matter insofar as it triggers the cascade of panic-default-bankruptcies, etc.

Be that as it may, at my paid site, The Strategic Planning Group, we’ve been discussing what to do, when The Sequel hits. I won’t bother recapitulating what I’ve written there—frankly, it’s too long, and besides, the details are why the SPG Members pay their dues.

The one issue I will discuss here is the notion of a safe haven:

In 2008, when all the stock markets were going south, and all the name-brand banks were teetering, where did everyone park their money? What was the safe haven?

Treasury bonds. In fact, the flight to safety was so massive that Treasuries reached negative yields, when you factored for inflation.

Treasuries are the traditional American safe haven. But what with the recent spate of, er, questionable events (Debt celing conniption fit, anyone?), Treasuries aren’t looking as safe as they used to, nevermind the (cosmetic) S&P downgrade of their Treasuries rating.

But this isn’t an American crisis—this is a European crisis that will have catastrophic consequences in America—but the epicenter will be Europe.

What’s the safe haven in Europe? Gold.

In fact, in Europe, sovereign bonds have never been considered a “safe haven”, for the simple reason that sovereign debt in Europe has countless times suffered haircuts, defaults, outright national bankruptcies.

Since this will be a European sovereign debt crisis that will spread around the globe—but the epicenter of which will of course be in Europe—bankers and asset managers will pull their cash—euros—out of whatever they think is risky, and park it in some safe haven.

These European money men obviously cannot sell their assets and buy US Treasury bonds with those euros that they get. And they certainly won’t plug those euros into European sovereign debt, which is exactly the source of the panic. They won’t even park those euros in German bunds, for fear of contagion.

Therefore, it is reasonable to infer that, if and when there is a Lehman-like event in Europe that triggers The Sequel, the flight to safety will be to gold, which Europeans traditionally see as a financial refuge as surely as Americans consider Treasuries their financial refuge.

Hence in my estimation, gold will rocket on. I would not be surprised if gold crosses $2,000 an ounce when the Lehman-like event happens, and goes on quickly to $2,500 before the end of the year. On my scale of augury, this is head-and-shoulders above a Strong Hunch, just shy of a Fearless Prediction: $2,500 by the New Year’s. After that?

 

[CascadeFarmer]

The dog and pony show continues...

WASHINGTON (Reuters) - Examiners at the Securities and Exchange Commission are checking to ensure that Standard & Poor's followed all of its policies leading up to its downgrade of long-term U.S. debt, according to people familiar with the matter.

Oh and why didn't they look into S&P's past practice of maintaining high ratings for garbage?

I'm looking for a nice melt up to set up a nice short. We'll see.

 

[Madrus Rose]

Bernanke is dropping bombs on the Swiss. I bet the Japanese are going to have to intervene too. The dollar is tanking. Hot potato. Hot potato.

Swiss Ponder Battle Over Runaway Franc Bloomberg


I read somewhere that a Big Mac was ~$18 in Switzerland now. Racing to the bottom rounding turn two. Like I said. Financial warfare. In my signature Einstein ponders what weapons WWIII will be fought with. I believe I have his answer. Credit derivatives and printing presses.

When things go south in a hurry always tend to focus on the Oil/Energy patch & use as my proxy for general market bottoming . Caught bounces in the OIH group as it seemed "$120" was a line in the sand as the SP hit that H&S target perfectly @ 1120 area. OIH was the strongest leading sector today but is running into R .

But this can't be a good sign with the POO popping again along with all the commodities plus hot dry weather expected to lessen the corn crop putting more up pressure on food prices later on . That news popped the aggies last week & some of the refiners...but as food inflation hits globally , there goes peace on earth
http://247wallst.com/2011/08/12/foo...-peix-gpre-kft-sjm-gis-k-tsn-hrl-sfd-moo-dba/

Even that's become pretty hazy though now you must admit , so now content to think hopefully in terms of a lower trading range trying to establish itself in here now




* Oh...Last week took a look at the FXF after reading about the Swiss taking steps to bring down their Franc & after some searches we had just been talking about the "Big Mac Index" and found to my amazement the New York Crispy meal costs $18.76 US in Zurich .
( The Big Mac meal a whopping $15)

http://www.icmag.com/ic/showthread.php?p=4618933#post4618933

"Last week a "Big Mac" with fries & drink hit $15usd in Switzerland...$18.76 if you ordered the New York Crispy meal that a minimum wage employee in Minneapolis, Minnesota, would have to work for nearly 4-hours in order to afford it.

 

[Madrus Rose]

here's the correction on the Swiss Franc just after noting the "Big Mac" index last week , it was getting a wee bit "overbought" <G> somtimes read this Forex site for a little color & currency analysis
http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/top_fx_headlines/2011/08/15/SNB_Invervention_Threats_Gather_Steam_as_Franc_Target_Rate_is_Floated.htmlhttp://www.dailyfx.com/forex/fundam...er_Steam_as_Franc_Target_Rate_is_Floated.htmlhttp://www.dailyfx.com/forex/fundam...er_Steam_as_Franc_Target_Rate_is_Floated.html08162011.html

(Jersey Shore & Snooky getting more attention & ratings than the politics & market...geezus we're simply doomed as a nation )

 

[Madrus Rose]

That's what I'm thinking. Not much buying excitement in the recent run up from the lows and also...

Part bargain hunting & oversold tradeable bounce , watch AAPL in here which think gets stopped here tmorrow as it runs into the 20ma overhead resistance & pretty much proxy for the market, which had trouble even topping 1200 today...wouldn't give much for being long past 1220.

Of interest is this rise in the commodities & the POO and where Gold & $Silver go from here & Au at that top R again at $40. Lotta nice little bounces tho popping everyhwere as shorts finally covered and on real doggies too like NOK, WFR & RIMM <g

CREE was a nice one , that was one just missed, knew it was getting cheap...but in such a fast crashing swoon you can only have time to chart them all , this is where a team of traders better than one .

 

[CascadeFarmer]

wouldn't give much for being long past 1220.

Was hoping for a stronger opening. Watched the S&P nibble above 1,200 yesterday and would have liked to see it make a little move above there this morning or at least open flat.

(Jersey Shore & Snooky getting more attention & ratings than the politics & market...geezus we're simply doomed as a nation )

More and more I think the movie Idiocracy is really kind of like a forward looking documentary of sorts.

 

[Madrus Rose]

More and more I think the movie Idiocracy is really kind of like a forward looking documentary of sorts.

Every time i see a trailer on "Final Destination 5" since it came out think only of how fitting a movie to describe the inevitable fatal blow of more QE3 as just being too ironic...have begun thinking of now as the "HOLLYWOOD" Index .

Since entering the 21rst Century started out with two similar End of the World movies "Deep Impact" , Armageddon running thru a huge string of natural disaster & macabre horror movies down to the present and it just gets to be even darker all the time . Hollywood seems to capture a decade long Zeitgeist of fatalist resignation that if anything can go wrong it will in the largest proportions , almost as if HOLLYWOOD is subconsciously portraying the state of things are heading .

China's setting up her own exchanges in commodities & supply chains now with Brazil , Australia, Canada. ME while the US & Europe struggle with massive debt, flagging economies while trying to fix the problem with what will inevitably lead to either more inflation & devaluation & risk outright global recession . The Emerging Markets & China have now risen to 1/2 the total world's GDP .


And the worse it gets the more Americans try to bury their heads into more escapism, Auto Races, Sports , Netflix & Social Networking .After 10yrs in Iraq & Afghanistan & trillions spent, if we leave Iraq now the largest standing army there is under Shiite rule with alliegance only to Iran who was our our original target in the first place !! After we leave Afghanistan the Taliban step right back in & declare victory having waited us out ....brilliant stuff .

German GDP #'s out today , Europe economy slowing to a standstill and our largest trading partners and Gold looks like its on its way to $2000. What were witnessing is TEOTWAWKI Dawn.

The End of the World as We Know it , the death of the Dollar & the Supremacy of the US .

 

[Madrus Rose]

European Stock Futures Fall After German GDP Data

http://www.cnbc.com/id/44154857?__source=yahoo|headline|quote|text|&par=yahoo

 

[CascadeFarmer]

will inevitably lead to either more inflation & devaluation & risk outright global recession.

The End of the World as We Know it, the death of the Dollar & the Supremacy of the US.

Totally agree with the first part.

Yeah I also think the TEOTWAWKI but not the end of the world. When the crisis happened a few years ago I told friends there will be no recovery and what's happening is more of an adjustment to a new reality for the US.

 

[SpasticGramps]

Market dumping after France and Germany's emergency meeting and subsequent joint Ponzi Pep Talk. No "Eurobonds" for now. No ESFS expansion for now.

They are however proposing a "collective" government for the EU with an EU President. Merkel said the debt brake will be anchored in German and French law. Pretty amazing. They just took over the European continent without firing a shot. Hitler would be proud of his homeland.

Market still doesn't like it and is tanking hard. Europe was down today despite the ban on short selling lolol. That central planning sugar high lasted 48hrs. With Euro GDP slowing to a crawl I believe we are setting the stage for the next major crisis which will make 2008 look like breezy summer day.

 

[CascadeFarmer]

Shaping up to be a down day on increased volume. No real buying lately and the selling has all been heavy.

 

[SpasticGramps]

‘Death cross’ springing up everywhere

BEND, Ore. — The “death cross,” a high-profile bear-market indicator, springs up everywhere.

The death cross forms when the 50 Day Moving Average crosses the 200 Day Moving Average in a downward trajectory and is a widely followed indicator that’s commonly viewed as a harbinger of bear markets.

Last week, it flashed its warning, not only in the major indexes, but in many key sectors, as well.

Late last week, the death cross showed up in the S&P 500 SPX -1.65% , Dow Jones Industrials DJIA -1.25% , Nasdaq Composite COMP -2.03% and Russell 2000 RUT -2.56% ; in other words, all three major U.S. indexes now are in death-cross mode, signaling the increased possibility of a new bear market in U.S. equities.

In a bull market, this crossover is known as a “golden crossover” while a downside cross like the one that just occurred is known as the death cross or “dead cross.” This is a unique indicator whose validity has been statistically well proven; in fact, Dow Jones Indexes has even developed an index to track the golden-cross and death-cross action, called the Dow Jones Golden Crossover U.S. Large-Cap Total Stock Market Index.

Death crosses everywhere as Bernanke hurriedly runs around with his hammer pounding nails into the global economy's coffin.

I'm getting my a new Dish network box sent to me. Mine has been broke for almost a month now. It broke right before the debt ceiling circus and I didn't bother to get it fixed. Giving what's going on now I wouldn't want to miss the action. It's amusing to watch the propagandist permabulls squirm around in their seats.

 

[CascadeFarmer]

http://www.marketwatch.com/story/death-cross-springing-up-everywhere-2011-08-16Death crosses everywhere as Bernanke hurriedly runs around with his hammer pounding nails into the global economy's coffin.

I do think the thing to focus on now is shorting. I think the recent breakdown in the market was the start of a new bear cycle. Was too intense of a drop regardless of the 'why' behind it.

The 50 is just about ready to cross the 200 on the Q's today. A little downdraft for a day or two and it'll make it.

 

[SpasticGramps]

More and more I think the movie Idiocracy is really kind of like a forward looking documentary of sorts.

Couldn't agree more. Love that show/documentary. Great social commentary.

 

[CascadeFarmer]

I'm a big Investors Business Daily fan in some ways. Here's their closing headline for the day...

U.S. Stocks Decline As Volume Picks Up

Yes another distribution day. No real buying and active selling. I think there's more of that to come.

I'm short the general markets again.

 

[CascadeFarmer]

Death to Bernanke!

Death to Bernanke!

Gotta love those Texans

Republican Presidential nominee Rick Perry spoke in Iowa tonight and had some nasty words for Ben Bernanke. Think Progress first reported Perry's unusual words for the head of the Federal Reserve. Perry told supporters at the end of his first full day campaigning in Iowa that he wasn't a big fan of the head of the Fed, and suggested that Texans would probably beat Bernanke up if he prints anymore money before the next election.

“If this guy prints more money between now and the election, I dunno what y’all would do to him in Iowa but we would treat him pretty ugly down in Texas. Printing more money to play politics at this particular time in American history is almost treasonous in my opinion.”

As TP points out, the punishment for treason is capitol punishment. Therefore, as Gawker's Max Read puts it, "Rick Perry Wants to Execute Ben Bernanke." ABC News has an expanded answer, with a little more economic analysis and fewer physical threats, as pointed out by Politico's Maggie Habberman.

 

[SpasticGramps]

Not the worst idea I've heard. My master is a real POS.

 

[SpasticGramps]

Bank of America Merill Lynch Country Wide Toxic Dump has an announcement to make.

One Of Worst Monthly Sell Offs In High Yield Market's 25 Year History Implies "100% Probability Of Mild Recession"

More flashing red recessionary indicators are coming courtesy of the largely ignored High Yield market, which following a 5.3% decline is, as Bank of America (itself ironically contributing substantially to the blow out) says, is shaping up to be "among the worst months in the HY market's 25 year history, in a bad company of post-Lehman, post-WorldCom, post-9/11, and post-Russia sell-offs. The difference of course is that we did not have the largest bankruptcy in history taking place (LEH or WCOM shared that title at a time), no terror attack, and no outright sovereign default (Russia in Aug ’98). What we did have however, is a global risk-off trade, sparked by concerns that this fragile environment could slip into a double-dip recession as consumer and business confidence fails to sustain repeated beating from sovereign and financial systemic risk issues." What we also did have is the near end of the modern ponzi economic model, whose viability was once again extended courtesy of a variety of sticky objects thrown at the wall with hopes one sticks. For now the obliteration has been halted, although one thing is undeniable - central planner intervention buys increasingly less and less time. We are confident that August is just the beggining of pain for not only HY, but all other asset classes. And some more ammo for those who like comparing 2011 to 2008: "Parallels are being drawn between today’s environment and that of 2008, given the degree of equity destruction that has taken place across the financial space. Financial CDS – the epitome of ’08 systemic risk – are trading at an average of 190bp in the US, within reach of Oct ’08 levels, and 240bp in Europe, well north of their ’08 wides." What do spreads imply? Nothing short of recession: "The HY index, in the meantime, has widened to 739bp as of close on Thursday, its widest level since Nov 2009. With the spread normally peaking at 1,000bps in full recessionary periods2 (1991 and 2001-02) and bottoming at 250bp in times of strong economic growth, the current level is pricing in an 80% probability of a fullblown contraction in GDP, and a 100% chance of a mild recession."

BofAMLCY.POS. Closed at 7.41 today. Kind of starting to look like Enron with the CEO running around CNBC with his butt puckered.

 

[SpasticGramps]

Charting Bernanke's bombing of Japan.

Charting Japan's Latest Failed Currency Intervention Attempt

Bloomberg's Mike McDonough has put together the simplest, and thus best, chart of the latest epic collapse in the BOJ's attempt to intervene and keep the Yen from appreciating. The chart needs no explanation, and shows that the half life of BOJ interventions is not only exponentially shorter but now, outright laughable. What does need an explanation, however, is the prevailing quandary of just what sleeping medications Noda and Shirakawa will have to take once USDJPY touches on 75, then 70, then 65, then 60 and so on, and they watch, watch, watch, the "one-sided" moves in the USDJPY, helpless to do absolutely anything as the Chairman drop kicks yet another monetary opponent into a permanent knock out.