My Candid View – Part 6

Hi FOFOA,

Here’s a snippet from Once Upon a TIme you will no doubt recall:

“The ECB, on the other hand, is not mandated to assist the economy like the Fed is.”

On the surface that condition might seem to contradict my view about monetary systems, namely that monetary systems must ensure that essential economic activity is facilitated or they will be discarded, but the price stability

My Candid View – Part 5

As a preparation exercise for the interview, Edwardo wrote out answers to some basic questions related to Freegold and these are a few discussions on specific topics that followed:

On inevitability:

It may not be inevitable, but amongst a list of possible outcomes it appears to have a high probability of coming to fruition because…
The way I view Freegold, I think that it actually is

My Candid View – Part 4

This part begins my multi-part conversation with Edwardo prior to the RT interview. Edwardo agreed to do the interview as long as I would spend some time clarifying for him some aspects of my view on various topics. As most of you know, I consider Freegold to be a lens of sorts, a way to view the trail we all walk in a different light. And for the most part, what I try to do on this blog is

My Candid View – Part 3

FOFOA,

I have something I hope you can clarify for me. I think I know the answer but I don’t like the low degree of confidence I have in my understanding. It is probably within your previous writings but a simple explanation has eluded me thus far although I think it might have been in “legs” and just went over my head.

I believe that only the BIS has the power to save the paper gold market.

My Candid View – Part 2

FOFOA,

I have seen a LOT of comments on negative GOFO rates (“backwardation”) in the last week or two. I believe you once referred to this as a “paper gold” event, and so not as dramatic a deal as Fekete wrote about several years ago.

But, this negative GOFO has persisted and it goes all the way out to Feb 2014… Are there any signals that we should be aware of? And can you please remind me

Eighteen Percent of the EU is Literally Junk, Carried As Risk Free Assets at Par at 30x+ Leverage: Bank Collapse is Inevitable!!!

So, the next domino falls in the Pan-European Sovereign Debt Crisis. As has been the casse for much of the Asset Securitization Crisis and the Pan-European Sovereign Debt Crisis, the ratings agencies have arrived to smoldering pile of ashes littered with charred bones and remnants of the putrid smell of burnt flesh with a fire hose and a megaphone yelling “Get out! We have word there may be a fire here!Continue reading “Eighteen Percent of the EU is Literally Junk, Carried As Risk Free Assets at Par at 30x+ Leverage: Bank Collapse is Inevitable!!!”

The Pan-European Sovereign Debt Crisis

The Asset Securitization Crisis of 2007, 2008 and 2009 led to the demise of several global banks and institutions. Central bank induced risky asset bubbles gave rise to, what was popularly considered and reported as through the popular media, a rapid recovery. The reality was that the insolvencies that marked the crisis were passed on, in part, to the sovereign nations that sponsored the Crisis, and as the chickens came home to roost the Asset Securitization Crisis has now blown into a full Sovereign debt crisis.

The Pan-European Sovereign Debt Crisis, to date (free):

  1. The Coming Pan-European Sovereign Debt Crisis – introduces the crisis and identified it as a pan-European problem, not a

    Latest Pan-European Sovereign Risk Subscription Research – The Good Stuff!!!

    Actionable Intelligence Note For All Paying Subscribers on European Bank Research


    The Pan-European Sovereign Debt Crisis A Review of the Spanish Banks from a Sovereign Risk Perspective – retail.pdf

    The Pan-European Sovereign Debt Crisis A Review of the Spanish Banks from a Sovereign Risk Perspective – professional

    The Pan-European Sovereign Debt Crisis Ireland public finances projections

    The Pan-European Sovereign Debt Crisis Spain public finances projections_033010

    The Pan-European Sovereign Debt Crisis UK Public Finances March 2010

    The Pan-European Sovereign Debt Crisis Italy public finances projection

    The Pan-European Sovereign Debt Crisis Greece Public Finances Projections

    The Pan-European Sovereign Debt Crisis Banks exposed to Central and Eastern Europe

    The Pan-European Sovereign Debt Crisis Greek Banking Fundamental Tear Sheet

    The Pan-European Sovereign Debt Crisis Italian Banking Macro-Fundamental Discussion Note
    The Pan-European Sovereign Debt Crisis Spanish Banking Macro Discussion Note

    localized one.

  2. What Country is Next in the Coming Pan-European Sovereign Debt Crisis? – illustrates the potential for the domino effect

  3. The Pan-European Sovereign Debt Crisis: If I Were to Short Any Country, What Country Would That Be.. – attempts to illustrate the highly interdependent weaknesses in Europe’s sovereign nations can effect even the perceived “stronger” nations.

  4. The Coming Pan-European Soverign Debt Crisis, Pt 4: The Spread to Western European Countries

  5. The Depression is Already Here for Some Members of Europe, and It Just Might Be Contagious!

  6. The Beginning of the Endgame is Coming???

  7. I Think It’s Confirmed, Greece Will Be the First Domino to Fall

  8. Smoking Swap Guns Are Beginning to Litter EuroLand, Sovereign Debt Buyer Beware!

  9. Financial Contagion vs. Economic Contagion: Does the Market Underestimate the Effects of the Latter?

  10. Greek Crisis Is Over, Region Safe”, Prodi Says – I say Liar, Liar, Pants on Fire!

  11. Germany Finally Comes Out and Says, “We’re Not Touching Greece” – Well, Sort of…

  12. The Greece and the Greek Banks Get the Word “First” Etched on the Side of Their Domino

  13. As I Warned Earlier, Latvian Government Collapses Exacerbating Financial Crisis

  14. Once You Catch a Few EU Countries “Stretching the Truth”, Why Should You Trust the Rest?

  15. Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!

  16. Ovebanked, Underfunded, and Overly Optimistic: The New Face of Sovereign Europe

  17. Moody’s Follows Suit Behind Our Analysis and Downgrades 4 Greek Banks

  18. The EU Has Rescued Greece From the Bond Vigilantes,,, April Fools!!!

  19. How BoomBustBlog Research Intersects with That of the IMF: Greece in the Spotlight

  20. Grecian News and its Relevance to My Analysis

  21. A Summary and Related Thoughts on the IMF’s “Strategies for Fiscal Consolidation in the Post-Crisis

  22. Euro-Gossip Debunked, Courtesy of Trichet and the IMF!

  23. Greek Soap Opera Update: Back to the Bailout That Was Never Needed?

  24. Many Institutions Believe Ireland To Be A Model of Austerity Implementation But the Facts Beg to Differ!

  25. As I Explicitly Forwarned, Greece Is Well On Its Way To Default, and Previously Published Numbers Were Waaaayyy Too Optimistic!

  26. LTTP (Late to the Party), Euro Style: Goldman Recommends Betting On Contagion Risk In Portuguese, Spanish And Italian Banks 3 Months After BoomBustBlog

  27. Beware of the Potential Irish Ponzi Scheme!
  28. The Daisy Chain Effect That I Anticipated Appears To Have Commenced!
  29. How Greece Killed Its Own Banks!
  30. Introducing The BoomBustBlog Sovereign Contagion Model: Thus far, it has been right on the money for 5 months straight!
  31. With Europe’s First Real Test of Contagion Quarrantine Failing, BoomBustBloggers Should Doubt the Existence of a Vaccination
  32. What We Know About the Pan European Bailout Thus Far
  33. As I Warned Yesterday, It Appears the Market Is Calling the Europeans Bluff – It’s Now Put Up Or Get Put Down
  34. How the US Has Perfected the Use of Economic Imperialism Through the European Union!
  35. The Greek Bank Tear Sheet is Now Available to the Public
  36. BoomBustBlog Irish Research Becomes Reality
  37. PIIGSlets in a Bank: Another European Banks-at-Risk Actionable Research Note
  38. Sovereign debt exposure of Insurers and Reinsurers
  39. As We Have Warned, the Fissures Are Widening in the Spanish Banking System
  40. With the Euro Disintegrating, You Can Calculate Your Haircuts Here”
  41. What is the Most Likely Scenario in the Greek Debt Fiasco? Restructuring Via Extension of Maturity Dates
  42. The ECB and the Potential Failure of Quantitative Easing, Euro Edition – In the Spotlight!
  43. Introducing the Not So Stylish Portuguese Haircut Analysis
  44. A Comparison of Our Greek Bond Restructuring Analysis to that of Argentina
  45. Osborne Seems to Have Read the BoomBustBlog UK Finances Analysis, His U.K. Deficit Cuts May Rattle Coalition

This Guy is Really Pessimistic. He Must Be Using That Math Thing!

This site (freebuck.com) came up in a Google search this morning, and it was just full of good cheer. Enjoy! In the future (if the guy is reading this), please link back to the blog).

2010 will also be challenging for G7 Sovereigns as they TRY to rollover inconceivable sums of existing debt while borrowing NEW money to pay for the WELFARE states’ spending. Trillions of dollars of borrowing challenges lie directly ahead; let’s look at some illustrations of the rollover requirements for Germany, France, Portugal, Ireland, Italy, Spain and Greece fromwww.newyorktimes.com and Reggie Middleton’s Boom Bust blog;

 

These are just the rollover requirements for the United States and do not include NEW BORROWING of $1.6 TRILLION.  So, a total of OVER $3.5 Trillion is required, providing that the deficits are as projected by the CBO (are they ever accurate?).  That’s almost $300 Billion a month, or $10 Billion a day (10,000 million a day).  Mind numbing numbers!  Inconceivable sums.  Now let’s look at European rollovers from Reggie Middleton:

Think of the US issuance and add this to it.  Where will the money come from?  The printing press in one form or another.  That’s just the rollovers; now let’s look at NEW issuance to cover 2010 DEFICITS from www.forbes.com:

This is called INSANITY.  Only IndiaChina and the emerging world are growing in REAL terms, the rest of the borrowers are DEADBEAT welfare states with shrinking incomes and economies, when properly adjusted for inflation.  How the US and Europe are going to navigate the rest of the year without some MISHAP is inconceivable.  That will be the appearance of the “when HOPE to FEAR” moment we are looking for in 2010.   This DOES not include BANK and brokerage debt (totaling OVER a trillion dollars) which must roll.  

Well, the reason why it seems like China is growing in real terms is because they are blowing a BIG BUBBLE! It is not sustainable, and when it pops it will actually push them back some. See

I actually suggest you read the entire post, for although some of the charts and info are dated (the circumstances have changed somewhat) and other bits of info are anecdotal, it does give a good background of why anyone should be bearish – http://www.freebuck.com/articles/tandros/100326tandros.htm

Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!

If this article goes viral around the web, I wouldn’t be surprised if the euro tanks and several European sovereign states’ spreads blow out. I have busted several of them in another of a long series of “creative” economic forecasting schemes to fudge the appearance of “austerity”.

Well, its official (sort of). Greece, a member of the European Union, will probably join the ranks of countries like Latvia (where policies are limited by the choice of the currency regime), Iceland (where the crisis has resulted in a very heavy external debt burden), the Ukraine (which is still affected by financial and political fragility) and a bevy of third world and emerging market countries in distress from the (not very) esteemed club of IMF financial aid recipients. What does this portend for the Euro? Well, I have blogged earlier in the year that the Euro’s credibility is now highly suspect and those pundits who dared contemplate the Euro potentially replacing the dollar as the global reserve currency now see the folly of their ways. The chances of a break-up are significantly higher and quite realistic. Credit Agricole’s currency strategist puts it succinctly:

“If Greece goes with the IMF, that says something terrible about the political process within Europe,” said Stuart Bennett, a senior foreign-exchange strategist at Credit Agricole Corporate and Investment Bank in London. “This undermines any confidence in the currency.”

Greece will probably end up defaulting on their debt, with or without the aid of the IMF, and they will probably have good company with several other EU members. I say so, and so does UBS Economist Donovan.

“I think it’s in an impossible situation,” said Donovan, who is based in London, in an interview with Bloomberg Radio today. “Europe has failed to clear its first serious hurdle. If Europe can’t solve a small problem like this, how on earth is it going to solve the larger problem, which is the euro doesn’t work. It’s a bad idea.”

How dare I make such a proclamation? Well, because I am telling the truth based upon facts and the many forecasts from the various sovereign nations are basically based upon lies, fiction and farce! As it is look at how the market is viewing the Greek tragedy:

European governments have yet to agree on how to fund any rescue for Greece, which says it will struggle to pay its debts at current market interest rates. While Prime Minister George Papandreou announced a 4.8 billion euro ($6.4 billion) austerity package on March 3, the extra yield that investors demand to hold Greek debt over German counterparts has since risen.

The spread was at 324 basis points today compared with 316 points at the start of the month. The euro fell 1 percent today to $1.3358, extending its decline this year to 6.7 percent.

I am willing to bet the “market” has not taken a strong, hard, objective look at those proposed austerity measures and uncovered the secrets that I am about to reveal. If they have, these spreads would have been blown out much wider.

A German finance official said yesterday that both countries may agree to involve the IMF. Papandreou said March 19 that Greece, which needs to sell about 10 billion euros ($13.4 billion) of bonds in coming weeks, is a step away from not being able to borrow and may need to turn to the IMF if European aid isn’t forthcoming.

Europe’s fiscal crisis shows the need for the euro region to create a common fiscal policy, former U.K. Chancellor of the Exchequer Norman Lamont said in an interview in London today.

“That would be the logical step,” Lamont said. “I don’t think they are prepared to do that, and without doing that I think the euro is a contradiction, a currency without a state.”

Bingo! The man hit the point right on the head. There are too many chiefs and not enough Indians.

I want to visually and verbally demonstrate what an absolute joke European economic estimates have been throughout this crisis, and more importantly how politicians and sovereign states are interpreting this joke in such a way that can deliver a punch line that can most assuredly end in sever global recession, or worse. This document/blog post alone should serve to sink the Euro and blow out CDS spreads for several European sovereign. Why? Because the truth hurts and the truth is not what has been coming from European sovereign states as of late.

The IMF and the EU have been consistently and overtly optimistic from the very beginning of this crisis. Their numbers have been dramatically over the top on the super bright, this will end pretty, rosy scenario side – and that is after multiple revisions to the downside!!! We can visit the US concept of regulatory capture (see How Regulatory Capture Turns Doo Doo Deadly  and Lehman Brothers Dies While Getting Away with Murder: Regulatory Capture at its Best) for the EU, but due to time constraints we will save that topic for a later date. To make matters even worse, the sovereign states have taken these dramatically optimistic and proven unrealistic projections and have made even more optimistic and dramatically unrealistic projections on top of those in order to create the illusion of a workable “austerity” plan when in reality there is no way in hell the stated and published plans will come anywhere near reducing the debts and deficits as advertised – No Way in Hell (Hades/Tartarus/Anao/Uffern/Peklo/Niffliehem – just to cover some of the Euro states caught fudging the numbers)!

Let’s take a visual perusal of what I am talking about, focusing on those sovereign nations that I have covered thus far.