Once you realize the only two paths left both end at the same destination, then the only rational action is to move your cash out of euros and the doomed banks, and liquidate your euro-denominated assets into some other currency as fast and as furiously as possible.
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Stacy Summary: Who’s the boss?
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Posted in Headlines
Tagged basel, capital ratios, capital requirements, germany, trichet, united states
Stacy Summary: It seems like a situation destined for disaster, but do you see any way out of it? Have a solution to this tragedy?
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Stacy Summary: ’Superman?’ Probably a bad choice of words . . . And re: Greece, this is something that Max has been saying for the three years since this ‘crisis’ began . . . that losses would continue to be ‘revealed.’
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First, a quick history lesson. The Weimar Republic was born following the end of World War One. The armistice forced Germany’s monarch, Kaiser Wilhelm, to abdicate and leave the country. In the civil chaos and revolution that followed, other major leaders, like the King of Bavaria, also were forced out of power. A semi-coalition government drew up a new constitution in the town of Weimar, hence the name.
The Weimar Republic got off to a shaky start due largely to the financial penalties imposed upon Germany by the Treaty of Versailles. To pay the Allied Powers, mostly Britain and France, France and Belgium even sent troops into Germany to force them to pay. Germany fired up the printing presses and cranked out worthless currency to pay the tab. After a few years of hyperinflation, the Weimar Republic elected a new chancellor, as well as a new head of the Reichsbank, and after November 1923 or so, the economy began to stabilize. But the social unrest was still prevalent. More
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Stacy Summary: I found this video interview with Chris Whalen via Jesse’s Cafe Americain. And here is another article from his site with some great, if scary, charts (see one below) about the recent deterioration in the US housing market.
Pending home sales:
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Posted in Headlines
Tagged double dip, fdic, federal reserve, finreg, germany, gold, housing, jesse's cafe americain, jim rickards, nouriel roubini, resolution authority, russia, sheila bair
Stacy Summary: Lots of fat fingers out there in our hyperactive digitally interlocked world. I love that despite S&P accidentally downgrading Germany the yields improved! Speaking of high frequency trading, Elizabeth King, an SEC associate director joins GETCO, who, along with Goldman Sachs, are a major SLP (see today’s On the Edge).
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Stacy Summary: German president forced to quit after accidentally telling the truth that war is about deranged economic ideology and then another headline about deranged economic ideologies.
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Stacy Summary: The ban on naked short selling in European government bonds and Germany’s 10 largest banks is apparently in place until March 31, 2011. Via @NicAbbo77 here is text of German ban on naked short selling. Regardless, the turmoil doesn’t seem as bad as post Lehman as many were warning yesterday and gold is off its all time euro high. It seems to me the argument from bankers is that we are in an Afghan poppy like corner – we have to let the warlords grow poppies or else there will be Taliban chaos! Failed states, failed markets. Or as Max says, “Without fraud there would be no markets” **UPDATE**: The final headline is from Denninger; and he says that there is also a ban on naked shorting of gold.
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Stacy Summary: h/t @marietta for the verbiage!
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Posted in Headlines
Tagged asia market, bankers, euro, eurozone, finland, france, germany, monetary union
Stacy Summary: Good morning . . . ?
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Stacy Summary: Lots of German bashing in the comments. And some Greek bashing. Hopefully we can discuss more economic issues surrounding how to get out of the massive trade imbalances that have marked the past few decades and also the fiscal issues of many of these governments having expanded their deficits when they transferred massive amounts of money to bankers by buying their toxic assets last year. By the way, I’m surprised Ireland is so high up on the trade surplus list; I wonder, however, if they are including all the US services that are then counted as exports?
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Rick Ackerman
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