Tag Archives: ecb

Cyprus Wealth Grab: The BIG TELL!

By AGXIIK:big tell

I call this THE BIG TELL.
If you play Texas Hold’em, you know what big stack, small stack, tells, reading the cards and going ‘all in’ means.
We, the people, are in the BIG GAME. This is the one where you get to play for the entire stack, or nothing, depending on your skills. It’s a winner-takes-all game.

The evil Troika banks, their ghouls, Bernanke, LeGard, Draghi and Merkel the Merciless are dead set on making an example of Cyprus. This is not about the debts owed or the bankrupt banks. It’s about control, controlling the table, going ‘all in’ with a policy of scorched earth and making an example of Cyprus so the PIIGS get the message that they are next. This ‘all in’ message was a warning shot across the bows of the middle stacked plays like Spain and Italy. You are next! We plan to take your stack, your deposits, your pensions, even your livelihoods and lives, and send you to the rail. Get ready!

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SD Weekly Metals & Markets 3/23: Cyprus is Lehman & MFG- Financial System on the Edge!

Youtube SD WeeklyEric Dubin & The Doc break down the week’s  trading action in gold and silver and preview next week’s options expiration in the metals.

We discuss the implications of the Cyprus bail-in, whether bank runs are imminent in Greece, Italy, & Spain, and the likelihood that a full-blown contagion has been triggered due to the loss of confidence in the banking system.
Click here for the latest SD Weekly Metals & Markets:

ECB/IMF Trigger Collapse For a Lousy €10 Billion! – Are They Pulling the Plug?

bank collapseThe news over the weekend is that the Cyprus banking system will have a “holiday” on Monday which was “scheduled” AND at least Tuesday which was not. The ECB and IMF wanted a 40% haircut and apparently the deal reached is one where balances under €100,000 will be reduced by 6.75% and by 9.9% for those over €100,000. Understand that much of what is deposited in Cyprus are funds from wealthy Russian oligarchs and mafia.

This is a disaster on so many levels I can’t even count them all. First off, what happened to the rule of law? I thought that in a capitalistic society that equity holders lose first, then preferred shareholders followed by unsecured then secured debtors…DEPOSITORS are the absolute last in line to lose money. This is being called a “tax”, when in reality it is outright theft! In this case the depositors are first in line which will surely cause a bank run in Cyprus…which will be followed by runs in other places like Greece, Spain, Italy and Portugal. Make no mistake, this could turn into something ugly and HUGE very quickly as the world runs entirely on confidence and won’t run without it.

Investors (depositors) the world over will see this and shortly understand that the rule of law is no longer and that “possession” is now more than 9/10th’s of the law. The possibility exists that within 2 weeks the entire system is shuttered.
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Euro True Money Supply trends suggest another deflationary scare?

Euro TMS, which represents our preferred Austrian inspired money supply aggregate, posted a year-over-year rate of growth of 6.3% in January, down slightly from the recent high of 6.5% seen in November 2012. Still a relatively robust rate of monetary inflation, but for how long?  Well, we think the prospects for monetary inflation in the Eurozone are suspect indeed.  In fact, we think a  deflationary scare awaits the Eurozone unless and until OMT is implemented.

More HERE

Call me a prophet of doom if you want, but Europe’s meltdown isn’t a recession – it’s a coming depression

By Mitch Feierstein 

Those financial forecasters, like myself, who take a generally dark view of world affairs are known by a number of monikers: prophets of doom, killjoys, pessimists, Cassandras. And that last one is interesting.

Cassandra, in ancient Greek myth, was the daughter of King Priam of Troy. After Helen, she was considered the most beautiful woman on earth. Curly red hair, blue eyes, fair skin. (I know: she sounds more Irish than Turkish, but work with me.) Because of her beauty, the god Apollo fell in love with her and gave her the gift of prophecy. When she did not return his love – always a dangerous game when dating a god – he cursed her, ensuring no one would ever believe her prophecies. Continue reading →

Nationalise the potentially insolvent RBS? Or Let them fail, you decide… It’s your money!

Solution? Business secretary Vince Cable has said he wants to nationalise the 18pc of RBS that isn't already owned by the taxpayer

Solution? Business secretary Vince Cable has said he wants to nationalise the 18pc of RBS that isn’t already owned by the taxpayer

Vince Cable wants to nationalise RBS. You can see his logic. The taxpayer owns 82% of the firm already. Nationalisation is hardly such a radical idea; it’s more the logical completion of a process.

It’s true that full nationalisation was never the advertised outcome. We were promised that these part-nationalised banks would be rapidly strengthened and restored to full private ownership.There were even muttered suggestions that the government could end up making a profit on its stake. Continue reading →

Hey, There’s a Worm in the Apple (Inc.)

Back in April, I wrote a piece about Apple Inc. I suggested that the company’s stock price was a little frothy. I suggested caution was in order. At time of writing that piece, the company’s stock price was at about $635, just a shade off its high.

I got crucified for that piece. Virtually everyone commenting said that my comparisons were inappropriate, that I couldn’t possibly own the company’s products, that I didn’t understand the company’s value-drivers. The consensus of opinion was that investors should continue to add, with caution, to their portfolios. Since that discussion, the company’s stock price dropped around $100 in a matter of weeks, before recovering some of the lost ground since.

And my view hasn’t changed. For the sake of absolute clarity, let me repeat what I said last time. I love this company. I love its products. I own the lot: iPhone, MacBook Pro, iPad, iPod. This company is so good that they could come up with pretty much any three letter word, stick an i in front of it, and I’d be in the line to buy it, whatever it was. If Apple produced a cheese grater, it would be the best cheese grater in the world.

But you need to put those things to one side when considering your stock portfolio. You need to operate with reason, not adoration.

First, let’s consider the general background to this stock. It’s up almost 8,000 percent since December 1995. If you look at the most recent trading data, you can see the price has gone parabolic. On a curve that points upwards at infinity. And simple market experience tells me that these things never last. The dotcom boom didn’t. The housing boom didn’t. This Apple boom won’t either. Markets are apt to vicious corrections and overcorrections. They happen most of all when the parabola looks most enticing.

And then again, think of the economic background. Europe is rapidly approaching a debt meltdown. We’re approaching our own fiscal cliff. No matter who comes into office this winter, we’re about to enter a period of much needed fiscal austerity which will surely threaten the U.S. economy with renewed recession. (Or worse: I think an extended depression the most likely outcome.) At times like these, equity ratings should be cautious, not bullish. Apple’s rating is still sunnily optimistic.

It’s also worth thinking of the fragility of our financial markets generally. The federal government currently borrows ten-year money at 1.42 percent. Our government debt is rapidly approaching the levels last seen at the end of World War II. We have no plan for regaining control over the budget. The Fed has exhausted every tool of monetary policy and has, indeed, risked creating a huge inflationary problem down the road.

The truth is that 1.42 percent is an insanely low yield for a borrower in the shape that the government is in today. Sooner or later, the government bond market will correct (it would do so much faster if the Fed stood back) and there will be an inevitable rebound on to equities.

So much for the general argument. The specifics on Apple are no more cheering. Analysts expected third quarter revenues to come in at $37 billion; they came in at $35 billion. The miss on earnings was even worse: analysts had penciled in $10.36 a share, and the outcome was more than a dollar per share worse than that at $9.32.

Sales of iPods fell. Sales of Macs were flat. Sales of iPhones were up on the year, but sharply down on the prior quarter. Sales of tablets were excellent, but the competitive background is changing fast. The new iPhone is great, but it’s not a game-changer the way the first one was. It’s kind of like the Rocky films. Rocky 15 just won’t lift the heart the way the very first one did.

Now at this point, I should probably reiterate what I said at the start. I love this company’s products. I think the company that Jobs built is the most impressive American company to have emerged since the days of Ford and General Electric. But those judgments are different from judgments about valuation. The results just announced are not the results of a gravity-defying company, but of one governed by the same laws of competition that everyone else faces too.

People haven’t got bored of smart phones or of anything else that Apple makes. But sometimes, as an investor, you have to stand back and ask, really? And the question here is really twofold. One, can Apple’s top line growth continue when its markets are becoming relentlessly competitive? Two, can Apple’s near 40 percent operating margin persist when every big electronics and Internet company on the planet is out to steal the firm’s lunch?

The correct answer to both questions is no. I go on believing that Apple is as good as a company can get. I love its products. But Apple’s boosters have forgotten the laws of competition, which say that you can run ahead of the pack for a while, but not for ever. The economic and financial background is heinous. Apple’s ascent has been parabolic. And the firm now has a raft of competitors which are starting to look lean, sharp and switched on. The stock has fallen a further 6 percent since the company announced its results, but the fall has a good way further to go yet.

Mitch Feierstein is CEO of Glacier Environmental Fund and author of Planet Ponzi: How bankers and politicians stole your future

Yanis Varoufakis: “This is what a monetary union on the verge of collapse looks like.”

Under normal conditions, such an aggressive interest rate reduction would drag downward all interest rates: with private banks being able to borrow at a pitiful 0.75% from the ECB to lend on to the private sector, and having no incentive whatsoever to park their idle capital with the ECB, one might have hoped (as the ECB’s President, Mr Mario Draghi, clearly did) that banks would be more willing to lend and at a lower interest rate. However, such hopes would have been baseless. Indeed, the interest rates p[aid by households and companies remained high, the banks’ funding costs even increased, and the normal ‘monetary transmission mechanism’ (i.e. the system that converts lower official Central Bank interest rates into an increase in the supply of money) proved to be broken and beyond repair. The question is: Why? Continue reading →