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  • Stability Of The European Union (21) August 28, 2013 To November 8, 2013 252 comments
    Aug 28, 2013 1:04 PM

    This instablog is designed as an interactive News Concentrator devoted to news and discussions about the debt and associated problems in the EU and its member states.

    The top portion of the instablog contains useful background information/ charts.

    Up-to-date news content is posed in the comments area. So if you are interested in current news, read the comments.


    A picture is often worth a thousand words. Here we have the Percent Economic Growth Rates for three countries: US, Greece, Germany. Note the distinct downturn in the US Economic Growth Rate.

    Here is National debt as a percentage of GDP in 2009 for the Euro Zone. Look at Greece and Italy.

    Here is Government deficit as a percent of GDP for 2009. Look at Greece and Ireland. Look at UK and Spain.

    Here is the all important Jobs Picture as of March 2010. Look at Greece, Spain, Ireland and France.


    What is the EFSF?:

    The European Financial Stability Facility (EFSF) is a special purpose vehicle financed by members of the Eurozone to combat the European sovereign debt crisis. The €110 billion bailout to Greece is not part of the EFSF guarantees, but a separate commitment.

    When you look at the Guarantee commitments by the different euro zone countries [] you will see something interesting. Greece, Ireland, Italy, Portugal, and Spain (i.e., the PIIGS) account for over one-third (36.7%) of EFSF commitments. All by themselves, Italy and Spain have a financial commitment of almost one-third (29.8%) of the total EFSF commitment.

    (October 23, 2011) I added this nice summary graphic of the Dominoes effect associated with the European debt crisis. You can also see the graphic and the accompanying article with the following link:

    (October 23, 2011) Guest Post: The European Financial Crisis In One Graphic: The Dominoes Of Debt. From: Zero Hedge, by: Tyler

    The original copyrighted graphic is from Charles Hugh Smith (" 2011)

    Added February 9, 2012

    Greek General Government Debt Percent GDP

    (March 10, 2012)

    Unemployment for individuals less than 25 rose to 51.1 %, twice as high as three years ago as budget cuts imposed by the European Union and the International Monetary Fund as a condition for dealing with the country's debt problems have caused a wave of corporate closures and bankruptcies.

    Fantasy Greek GDP Growth Rates:

    In the fantasy report "Greece: Preliminary debt Sustainability Analysis" dated February 15, 2012 which I referred to as the "Deus ex machine" report one of the EUs key economic assumptions was that Greek GDP growth in 2012 would be -4.8% and -1% in 2013.

    The Greek economy saw growth rates of:

    -0.2% in 2008,
    -3.3% in 2009,
    -3.4% in 2010,
    -6.9% in 2011
    -7.5% in fourth quarter of 2011.
    (Data from John Mauldin report

    I plotted the Greek GDP data below and projected the GDP values for 2012 and 2013 based on the current data. I also plotted the Greek GDP projections from the Deus ex machine report - blue line.

    There is no Greek stimulus, jobs are in freefall. Which projection do you believe?

    (March 29, 2012) Greek Deposit Run Update: Hopeless And Getting Worse.


    Added April 27, 2012

    Q1 unemployment is now one quarter of the working population or 24.44%, up nearly 2% from the 22.85% as of December 31

    (click to enlarge)

    Global PMI Changes from March to April 2012

    (click to enlarge)

    From: ZeroHedge


    (click to enlarge)

    From: ZeroHedge -

    Ten Year Bond Yield Curves as of 7/20/2012

    From: The Disciplined Investor

    (click to enlarge)

    Here are some interesting charts on Italy sourced from Bloomberg's BRIEF
August 7, 2012, available on "The Big Picture"

    I verified the shadow economy figures in the following sourced article about shadow economies:

    Shadow Economies: Size, Causes, and Consequences by FRIEDRICH SCHNEIDER and DOMINIK H. ENSTE, Journal of Economic Literature
Vol. XXXVIII (March 2000) pp. 77-114

    (click to enlarge)

    (click to enlarge)

    (click to enlarge)

    (click to enlarge)



    (click to enlarge)

    From: Labor Force Survey by the Hellenic Statistical Authority January 10, 2013

    (click to enlarge)

    From: Labor Force Survey by the Hellenic Statistical Authority January 10, 2013

    (click to enlarge)

    This chart is based on the data from the Hellenic Statistical Authorities Labour Force Survey published January 10, 2013.

    This shows the rate of change of unemployment among age groups from 2011 to 2012.

    Yet the Greek government, under the direction of the Trokia, is about to initiate an even more Draconian series of spending cuts and tax increases.

    Remember the IMFs fantasy report? GDP was supposed to start increasing again in 2012. Instead, it continued to fall, and this is one of the reasons why. They are systematically forcing people out of their jobs. No jobs, no income, no income, no spending.

    Yes, the 15-24 age group has unemployment at 56.6%, but as this chart shows, the older age groups are suffering a higher rate of increase of unemployment. So they are rapidly catching up.


    Latest youth unemployment chart as of May 31, 2013

    (click to enlarge)


    Remember, the top portion of this insta contains some useful historical information. CURRENT NEWS is posted in the comments area.

    WARNING: This is a no Troll Zone. If you are disruptive, your comments will be deleted.

Back To FocalPoint Analytics' Instablog HomePage »

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Comments (252)
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  • Author’s reply » Link to last concentrator:
    28 Aug 2013, 01:07 PM Reply Like
  • File in the WTF bin:


    Fidel Castro pens new essay on Syria, Snowden

    28 Aug 2013, 01:28 PM Reply Like
  • I thought he was dead.
    28 Aug 2013, 02:40 PM Reply Like
  • He's close enough!!!
    28 Aug 2013, 04:54 PM Reply Like
  • WSJ: As U.K. Seeks Consensus for Syria Strike, Iran Threatens Israel



    >>Officials from Iran, Syria's chief ally, said publicly for the first time that U.S.-led strikes on Syria would provoke retaliation on Israel. "Any attack on Syria would burn down Israel," Iranian news media reported Maj. Gen. Hassan Firouzabadi, chief of staff of Iran's armed forces, as saying.<<
    28 Aug 2013, 03:08 PM Reply Like
  • Can't talk about EZ without Nigel Farage. Here is his latest and its on Syria.

    28 Aug 2013, 04:54 PM Reply Like
  • Fed copy cat Bank of England-

    28 Aug 2013, 10:10 PM Reply Like
  • So the enemy is every where. Here is a quote for that from the worlds finest fighting forces absolutely most finest warrior.


    "They are in front of us, behind us, and we are flanked on both sides by an enemy that outnumbers us 29:1. They can't get away from us now!"
    - Lewis B. "Chesty" Puller, USMC


    When the Marines were cut off behind enemy lines and the Army had written the 1st Marine Division off as being lost because they were surrounded by 22 enemy divisions. The Marines made it out inflicting the highest casualty ratio on an enemy in history and destroying 7 entire enemy divisions in the process. An enemy division is 16500+ men while a Marine division is 12500 men.


    Tell the FED and the Bank of England to bring it on!!! The Marines are waiting......Patiently, eagerly, with anticipation and a smile....and bayonets and a rifle..


    See it in action....."Wind and the Lion" movie.


    Had a bottle of courage tonight. (wine).Ooorah!!!
    Heading out for Paris Island Sept 11 for our newist Marine spawned in Parris Island to graduate on Sept 11th and he is the son of a Marine buddy..


    For Weston Shelton!!!!



    Semper Fi Weston!!! Welcome to the Brotherhood.
    28 Aug 2013, 11:21 PM Reply Like
  • Congratulations to all, DG.


    My Dad was a Korea vet (Army, also WW2 and Vietnam and a few banana republic adventures).
    29 Aug 2013, 08:31 AM Reply Like
  • Congrats DG,
    I am also from a military family. Both sides of the civil war. Uncles in WWII. Dad a career Marine, started in Korea a Private, ended in VN as a Warrant Officer. I took his advice and went Air Force.
    I have a cousin in the Army and a grandson in the A F. Most people do not understand that when released from active duty, you are not released from the oath to protect and defend the Constitution from all enemies, foreign and domestic.
    29 Aug 2013, 12:55 PM Reply Like
  • Stilldazed, I never thought we would have to worry about the domestic. I believe that's our biggest threat now.


    I have a grandfather (not sure how many greats to put in front of grand father) that served in the Revolutionary War as a Major. My mom is a member of the "Daughters of the Revolution" since its her side of the Family. I need to get more info on another relative that served under George Washington. My mom can not find the papers with his name.

    29 Aug 2013, 02:32 PM Reply Like
  • DG,
    I agree with your threat analysis.
    That is some great family history. I haven't researched ours beyond what my great grandmother told me about.
    29 Aug 2013, 03:19 PM Reply Like
  • Let's see, DG, about that time my Cherokee ancestors on my Mother's side were chasing Red Coats down the Warrior's Path in the Appalachian Mountains (but were probably stealing horses from the Patriots if they got the chance - my Clan was never shy of playing during office hours). Meanwhile my German ancestors on my Father's side were still farming in Bavaria, and hoping some government troops didn't show up to steal all their crops like the last time...


    The first war (not counting occasional run-ins with Revenuers in those same Appalachian hills) the family got involved in was WWII, when the German side sent many sons off to war from the Midwestern wheat fields.


    Now, my Cherokee Great Gran always told us that our Clan never made peace with the White Eyes, and that's why we spent nearly 120 years selling them moonshine...


    So, technically, maybe I'm still in military service too, but it could get confusing.
    29 Aug 2013, 04:04 PM Reply Like
  • TB, My Great (how many times?) grandfather before John (his father )was killed by Indians in 1757 while working his fields near Shippensburg PA. Maybe some of your ancestors were involved with that. LOL
    29 Aug 2013, 05:03 PM Reply Like
  • Not likely. By then the Warrior's Path was overrun with white eyes and my clan was busy stealing livestock from our rich lowland cousins and selling it to the sidehill farmers in East Tennessee.


    Up there it would have been a different tribe, maybe the Seneca.
    29 Aug 2013, 06:01 PM Reply Like
  • Italy: Where Entire Factories Are Shipped Out Overnight



    Blasnik strikes again.


    Just another nail in the head that cannot be fixed. (ref:
    29 Aug 2013, 04:12 PM Reply Like
  • Well since we're talking family history, I'm directly related to people who signed the Declaration of Independence. Both mom's and dad's ancestors arrived to the USA before the USA existed, not long after the year 1700.


    My nephew, whose father's ancestors arrived on the Mayflower, is thought to be related to more people who fought in the Revolutionary War, than anyone alive. We know of 38 relatives.


    In a branch of my family tree are ancestors with the last name being Pontius, who are thought to be related to Ponce De Leon, and in the believe it or not category, Pontius Pilot.


    My mother was a relentless researcher of our family history in the pre-Internet days. In my hallway, hangs an extensive name-only family tree she created years ago that goes back 10 generations.


    What's really crazy, is that my nephew just was married in Tiffin, Ohio. I Googled up another variation of how my last name was then spelled. Was then linked into and just learned that a person by the name of Mary Troester was born circa 1860 in...Tiffin, Ohio. Ironically, Mary happens to be my mother's name.


    I just texted my nephew of this fact, and back came, "That's weird."


    My pop enlisted into the Army as a buck private, with the 107th Cavalry, and survived nine landings in the Pacific Theater, the last was Okinawa. Island hopping along the way he was promoted to captain and was placed in charge of an artillery unit. He was involved with Military Intelligence, and also post-WWII was involved with the Armed Forces Security Agency. This organization was created in 1949 within the Department of Defense, under the command of the Joint Chiefs of Staff.


    Later, when the NSA was created under Truman in 1952, my father helped pen some of the original covenants of the NSA, when the NSA was comprised of merely 38 people.


    Most of you already know the rest, and that's that my pop was part of a super-secret underground civilian government, HQed under Mt. Weather, in Maryland, where, if a Soviet sub popped up and nuked congress while in session, my father was to be both a liaison officer between the National Security Council and the Secretary of defense, and he also held another small position...he was to be in charge of the US economy.


    There are scoundrels in my family heritage, too. One tried to ruse through some paperwork trickery, ten square miles of real estate just outside of Philly. He ended up jailed. Imagine what that would be worth today.


    I'm lucky enough to be here today due to a miscalculation by the Navy. After boarding dad's cavalry unit onto a ship for transport to the Philippines, someone figured out there was not enough potable water for the horses to make the journey. The horses and my pop were off-loaded, and not long after the ship set sail, it was sunk by a Japanese sub. No survivors.


    Of course, dad was on Okinawa when we nuked Japan. After Japan surrendered, my father was sent into Tokyo, where he could have bought some land in downtown Tokyo for 25 cents an acre.


    Lastly, and something I had completely forgotten, my 94 year old aunt I just visited in Cleveland, was best friends with my mother before my father knew my mother. It was my father's sister, who introduced my mother to my father. How cute!
    29 Aug 2013, 05:17 PM Reply Like
  • Author’s reply » The UK House of Commons, in a razor thin vote, rejected the Cameron proposal for military action in Syria with a vote 285 to 272.


    Cameron promptly said he would respect the will of the House of Commons and UK Defense Secretary Phillip Hammond confirmed there would be no UK military intervention in Syria.
    29 Aug 2013, 07:14 PM Reply Like
  • Times reports that Obama will go it w/o Great Britain.

    29 Aug 2013, 07:35 PM Reply Like
  • Sounds like The One is channeling Dick Cheney.
    29 Aug 2013, 10:36 PM Reply Like
  • WT: I anticipated this from the get go. Betting 98% of Americans are totally unaware of Benghazi, and yet this administration is paranoid image-wise from that debacle, and will go ahead and toss some Tomahawks into Syria, as some sort of twisted half-baked reprisal.


    Of course, all the western endless debate has eliminated a quick strike, allowing for Syria to stow, hide, or do away with the chemical bombs.


    What's next, some inconsequential African country that's killing its own?


    I could write endlessly about how the USA has ignored genocide throughout the years of our lifetime.
    30 Aug 2013, 12:23 AM Reply Like
  • Maya, they have ignored the first 100,000 folks killed in Syria too!!


    There was obviously no red line for them. Except of course the first gas victims so I guess you have to cross the line twice to get some attention. If they are the ones that actually did the crossing......but when has facts or details gotten in the way of a good temper tantrum.
    30 Aug 2013, 08:39 AM Reply Like
  • Aspirin factories everywhere, beware...
    30 Aug 2013, 08:42 AM Reply Like
  • Yes TB I completely forgot about that.


    Did you know that after the plant was destroyed for producing nerve gas: "Officials later acknowledged "that the evidence that prompted President Clinton to order the missile strike on the Shifa plant was not as solid as first portrayed. Indeed, officials later said that there was no proof that the plant had been manufacturing or storing nerve gas, as initially suspected by the Americans, or had been linked to Osama bin Laden, who was a resident of Khartoum in the 1980s."


    Additionally "Critics of the attack have estimated that up to tens of thousands of Sudanese civilians died throughout Sudan as the supply of necessary drugs was cut off."


    It will be interesting to see what evidence they come up with and what retaliation occurs for this. I also wonder if congressional approval will be required which could end up going the way of the Brits. A no vote. That might be BO's graceful side step of the issue and then he could blame it on the Republicans.


    Graham, McCain and BO can then all go get a sorrow beer together.
    30 Aug 2013, 08:58 AM Reply Like
  • >Maya-


    "I could write endlessly about how the USA has ignored genocide throughout the years of our lifetime"


    Selectively, of course.


    30 Aug 2013, 07:00 PM Reply Like
  • Apparently the French are enthusiastically still in on attacking Syria according to Hollande.....but he has to send it for an... oops....parliament debate and the public is not so enthusiastic. He has called for the debate to begin on Sept 4th. BO will need to cool his jets for a while if he wants their support.

    30 Aug 2013, 09:31 AM Reply Like
  • Waiting (until vacation time ends in France, which would be September) seems likely, particularly with the massive leak storm about Thursday (now past) as the date certain.


    LOL, its wild to see a leftwing American President dithering about entering a new war without support from (of all people) the French.


    The debate in France could last until the next election... The next PRESIDENTIAL election.
    30 Aug 2013, 09:46 AM Reply Like
  • The latest CNN that I saw in reference to USA public opinion on an attack was 50/50 in general- lower with no other participants or UN sanction.
    30 Aug 2013, 07:05 PM Reply Like
  • Author’s reply » Russia Restructures Cyprus Debt:
    Yesterday, Russia agreed to restructure Cyprus' EUR 2.5 billion loan. Cyprus is to repay the EUR 2.5bn loan to Russia in eight semiannual installments starting in 2016, Deputy Finance Minister Sergey Storchak told reporters today, citing a revision of repayment terms approved at the latest cabinet meeting. The interest rate was lowered to 2.5% from 4.5%.


    Than we have this..
    This morning, Foreign Minister Kasoulides stated that Cyprus territory will NOT be available to launch military strikes against Syria, as "Cyprus wants to live up to its responsibility as a shelter if needed for nationals of friendly countries who evacuate from Middle East".
    Cyprus's economy has collapsed but Cyprus feels the need to become a shelter for evacuees and provider of humanitarian aid. That's not a cover story, that's an expression of contempt.
    31 Aug 2013, 04:42 PM Reply Like
  • LOL, having been bought, the Cypriot pols now are probably going to STAY bought for at least a year or so...
    31 Aug 2013, 06:00 PM Reply Like
  • Author’s reply » (Reuters) - President Barack Obama on Saturday backed away from an imminent military strike against Syria to seek the approval of the U.S. Congress, in a decision that likely delays U.S. action for at least 10 days.
    Disaster for the administration. The damage is immense.
    31 Aug 2013, 04:59 PM Reply Like
  • FPA, I would agree that the damage to the BO Administration's international leadership reputation was bad IF they actually had such a reputation. Otherwise, its just rating a shrug and a "...yes, that's what I thought" from other world leaders.


    I'm hazarding a guess here, and thinking it came as a surprise to BO when his friends the Russians and Chinese walked out on the Security Council when he needed support for his agenda - Great Britain (who has nearly ALWAYS backed the American play in such matters) simply said "no, thanks" - and France decided to discuss supporting the cause for a year or two.


    "The Ingenue", as BO is commonly called by his European non-friends, just doesn't get any respect.
    31 Aug 2013, 06:08 PM Reply Like
  • It looks to me like the POTUS slithered out of a bad political PR call rather neatly. "Let the congress decide" gives him fine cover, except for the "sword wavers" who want to smite Assad, for whatever reason. He can probably just take those off of his card list and hope to never hear from them again.
    31 Aug 2013, 11:36 PM Reply Like
  • No matter which (if any) course of action BO took he would be lambasted by polarized factions in this country as well as all over the world. Launch the Tommahawks? Gunslinger- No UN sanction. Hold off a while? Ignoring the slaughter. No guts.


    Brer rabbit done met up wid de tar baby fo sure-


    Will be interesting as to the congressional decision.
    1 Sep 2013, 11:20 AM Reply Like
  • Caution! Mention of Uncle Remus stories can get you a visit from the Thought Police:

    1 Sep 2013, 02:32 PM Reply Like
  • Smaturin: Well, the natural antidote to that is to act in a thoughtless manner, no?




    1 Sep 2013, 02:46 PM Reply Like
  • I thought the thought police was banned along with "1984".
    1 Sep 2013, 05:48 PM Reply Like
  • They will find you, Hard To Love- They are out there- Tin foil hat or no-
    1 Sep 2013, 05:49 PM Reply Like
  • >SM- Re: Thought Police




    I bought two!
    1 Sep 2013, 05:53 PM Reply Like
  • It is my understanding that not since the late 1700's has a British parliament not voted to support a PM in a request for military action.


    Finding that in the news is nearly impossible.


    The argument over if gas was used continues which seems to me to be a bunch of noise to hide the fact that they do not have evidence to tell us WHO did it so they hid that with the argument over IF gas was used and once we get that argument settled it will be time to make THEM pay without every determining who THEM actually is.
    2 Sep 2013, 10:35 AM Reply Like
  • This article says it is the FIRST TIME that this has occurred but does not mention the significance of it since it would probably be to humiliating to the PM and the country.


    "It is the first time that a British Government has been blocked from executing a military deployment and highlights the deep mistrust of official intelligence in the wake of the Iraq war."


    Apparently there was NO support at all from the opposition. Another rare occurence .


    "It is the first time since the 1956 Suez crisis that an opposition has failed to support Government plans for a deployment of the armed forces."

    2 Sep 2013, 10:39 AM Reply Like
  • FPA,
    This is the best choice in a no win scenario. BO had let his mouth overload his a$$. What ever happened to "walk softly and carry a big stick"?
    This way he saves some face.
    2 Sep 2013, 12:59 PM Reply Like
  • Worth reading if you follow oil & nat gas, don't let the title of the article keep u from reading it.


    Russia - oil fields have 20 years left

    2 Sep 2013, 04:07 AM Reply Like
  • Good article LT!


    If Russia abandons the pricing of NG tied to energy content of oil, and it all becomes spot-based, the investment in new liquifaction facilities here, which runs billions and several years per new facility (excluding up-front analysis, permitting, ...), will either have a much lower ROI or end up going bust in some cases, if too many are built.


    Either way, the U.S. stands to benefit as NG pricing at home remains low. Somewhere ISTR that use here vs, exporting had a job-creation effect of about 25:1 (citation not available, but I know I remember a number similar to that). That accomplishes something I wish to see with less government heavy-handed intervention. As to the investment in the facilities, that's risk-taking in a capitalist manner that allows failure.


    IOW tough noogies.


    I think we also benefit because, as the article points out, Russia has to start playing catch-up as they rotate from the previous policies and tactics to ones that demand more amiable ones with future trading partners. This benefits lots of folks I think.


    On the investors front: $(CPST) has various Russian companies, Gazprom being one, that in aggregate account for a substantial % of CPST business. They might have to reduce infrastructure investment. If CPST penetration into other good applications is insufficient at the time the RR (Russian Rotation) gains momentum, CPST could have a rough row to hoe (not ghetto-speak!).


    Ditto for other energy-related cos. that may be directly or indirectly dependent on the Russian energy industry.


    The long-term flip side is that if Russia does successfully diversify, internal demand for things related to the energy infrastructure could rise, benefiting those dependent companies. But I believe that would be quite a few years down the road.


    2 Sep 2013, 06:47 AM Reply Like
  • So far, these studies are still classic history based work, which is fine and good...


    When the industry is NOT awash in disruptive new technology, like fracing.


    As we have seen in North American, fracing will transform the picture. It would be unwise to assume that Russia lacks the same energy opportunities for the new tech that we have here - although it is true that we have capitalized upon it more completely.


    This is a picture in flux which does NOT translate well to a backward-looking conclusion.
    2 Sep 2013, 07:21 AM Reply Like
  • I found this after reading article on selling fossil fuel stocks now. It was based on global warming and the coming carbon tax of some kind.
    I have watched Exxon struggle this year with slow reserve growth and profits accordingly. BP struggling after the spill, Chevron and their possible $19 B lawsuit, leaks for them and Shell in Brazil and other areas, small companies dumping stakes raising case.....makes me wonder.?
    But, these big ones are "energy companies" they won't be tied to just oil.


    Either way, IF this is true about Russia, their wells will start to slow down in about 10 years. This should make oil go up, up, up. So then any alt energy has a better cost basis. Without Russia, oil would be $200/bbl now.


    Combine this with increased fuel mileage, more electric cars, the young not buying cars or driving, etc and gasoline should start feeling the effect of less usage.
    2 Sep 2013, 08:39 AM Reply Like
  • LT: The demand picture in the developed economies for oil is pretty stable but the demand ramping in countries like India, China, and the third world is enormous. The handoff in growth has already happened, and the prospects are closer than some folks might think.
    2 Sep 2013, 12:54 PM Reply Like
  • If this is true, they have a blockbuster:


    Isis heart drug helps cuts blood fat in trial
    Isis' (ISIS) ISIS-APOCIIIRx reduced levels of triglycerides in blood by up to 75% and of apolipoprotein C-III by 79% in a Phase II study of 28 patients.
    Triglycerides are a type of fat that raises the risk of heart disease, while apolipoprotein C-III prevents triglycerides from being cleared.
    Patients also enjoyed increases of up to 57% in high-density lipoprotein (HDL), or "good," cholesterol.
    ISIS-APOCIIIRx is based on Isis' antisense technology, which inhibits cells from producing proteins that cause diseases. (PR)
    2 Sep 2013, 08:48 AM Reply Like
  • They could corner the market. Billions but lets see how a test on more than 28 turns out.
    2 Sep 2013, 10:44 AM Reply Like
  • The (ISIS) drug also need some evidence that its effects actually increase lifespan. One of the problems with the statin drug group is little or no evidence that it increases lifespan. It has also been shown that reducing chlosteral does not reduce heart or artery disease.


    Whatever causes arteries to plug up, it isn't the "curd in the blood".
    Inflammation is the cause. But what causes that inflammation? Not yet known for sure, but anti-inflammatory drugs seem to help.
    2 Sep 2013, 01:43 PM Reply Like
  • SH, cholesterol drugs are here to stay. There are studies that show they reduce risks.
    The big deal with this drug is the increase in HDL. That is key.


    If this works, it "could" be the next Lipitor, and will garner a huge premium in a buy out.
    3 Sep 2013, 05:59 AM Reply Like
  • I was hoping for a $10 B deal, but this is close.


    Nokia soars following Microsoft deal
    Nokia (NOK) shares jump 37% in Helsinki following news that it's selling its mobile phone unit to Microsoft (MSFT) as part of a deal worth $7.17B.SA author Charles Fox reckons a major motive behind the transaction is that Nokia CEO Stephen Elop is now a dead certainty to replace Steve Ballmer as Microsoft boss.Shorn of a big loss maker and sitting on a nice cash mountain, the future seems bright for Nokia, although its potential could now be limited.Some might think that Microsoft is overpaying for a business "many investors and analysts wrote off as dead," but Fox thinks $5B "seems like chump change for a...division that once ruled the phone market" and could come back.Jacob Steinberg echoes these sentiments. "Nokia's phone business deserves a much better price than $5B considering how it generated $20.38B in revenues last year," says Steinberg.
    3 Sep 2013, 05:57 AM Reply Like
  • I can't believe I'm saying this, but I think MSFT made a good move this time... And about time. One thing Microsoft has proven adept at over the decades is milking a cash cow, and Nokia's $20b annual business will fit right in.
    3 Sep 2013, 08:02 AM Reply Like
  • Note: What I WOULD expect is a pop for Nokia, then a drop. Time to spot an exit, LT.
    3 Sep 2013, 08:03 AM Reply Like
  • I am already out, sold in pre-mkt at near this mornings highs so far.
    3 Sep 2013, 08:22 AM Reply Like
  • I agree with MSFT...they stole it compared to the creation of a new division from scratch.
    IMO, Elop will be the next CEO too. Soon as the deal closes.


    I will buy more MSFT on any further pull back.
    3 Sep 2013, 08:24 AM Reply Like
  • Great call LT-


    Just read that the hedgies got clobbered with their 'shorts' down.
    3 Sep 2013, 10:51 AM Reply Like
  • Quite a few articles out this morning on improving growth in the UK, China and other countries to go along with improving (or slowing drop in jobless rates) over the weekend.
    3 Sep 2013, 06:01 AM Reply Like
  • Another stock to watch is Nuance Tech. They are behind Apples Siri voice deal.
    Icahn is a 16% owner, he is also an activist with APPL,


    Rumor is he will pressure APPL to buy Nuance
    3 Sep 2013, 08:35 AM Reply Like
  • I'll be surprised if this happens short term...


    Long term out of the money Calls on Nuance might be an interesting gamble, though...
    3 Sep 2013, 12:28 PM Reply Like
  • Deutshe Bank also called the end to the Europe recession, so be careful out there. These surprises could start the next leg up or be too early creating a head fake....I do believe the EZ is better, but not so sure we are far enough along for a surprise up


    Rising Treasury yields welcome at the Fed
    It's not just U.S. data which justifies the big run higher in bond yields, says Goldman's Francesco Garzarelli, but there's even been positive surprises out of Europe.The Fed isn't worried about a 10-year yield in the 2.80% area, says Garzarelli - instead it was this spring's bubble-like 1.6% yield which had policymakers concerned. Volatility in fixed income could may be an issue now, but the September taper as well as the introduction of a new Fed chief should calm things a bit.Turning to rising long-term rates in the U.K., Garzarelli reminds the British economy "runs very much on variable rates," and as long as the Bank of England holds short rates down, higher Gilt yields should have little effect.TLT -1.1%, TBT +2.1%.Treasury ETFs: TLH, TLT, IEF, DTYL, DLBL, ILTB, TENZ, ITE, TLO, EDV, VGIT, VGLT, TMF, TYD, LBND, UBT, UST, TMV, TYO, DSTJ, DSXJ, SBND, PST, TBT, DTYS, DLBS, TBF, TTT, TYNS, TYBS, TBX.
    3 Sep 2013, 12:24 PM Reply Like
  • I have a few questions.....I am not interested in the "political" side of answers...I could care less whether u love or hate BO.


    As most know I had NOKIA and sold it yesterday. So I have cash to deploy. Also this week a sizeable amount of Bonds & Preferreds were called.
    So...Where to put it ?


    I was looking at Apple options, there is something going on with the China release right on the heels of the USA release, maybe a China Mobile deal? Up grades are flying.


    What bothers me is Syria....what will the market reaction be when missiles start flying?


    Also, todays trade numbers are all over the place....Trade deficit jumps (which I don't like), Exports down, Imports up, none of which I like.
    Manufacturing is on the upside which is good.


    UK & EZ numbers are showing improvement.....I expected this, but think it will be much slower than the USA recovery.


    I am watching GE, MSFT, NVAX, MNKD, APPL and a few more. For the record, I added to my MSFT & NVAX stake yesterday.


    I appreciate the feedback, I am still gun shy and want to make sure I don't jump the gun in front of Syria.
    4 Sep 2013, 09:05 AM Reply Like
  • Anyone leery of investing with Syria looming would do well to wait a week or two and see what comes out of Congress. Frankly I don't know which way the Demicans and Republicrats will jump on this one, the traditional roles have been reversed, re-reversed, and are now simply a quivering lump of protoplasm seeking the political center.


    Sorry, LT, but I consider this concern to be ALL about geopolitics (if not partisan politics).


    Divorced from politics, I would tend to say that our 5% correction is probably over, and there is a tiny sliver of daylight showing...


    But its NOT divorced from politics, and never will be. And I hate that, I really do.
    4 Sep 2013, 09:20 AM Reply Like
  • I was thinking the same on the 5% correction probably being over short of the war act.


    I still think that further positive news out of the UK & EZ will begin the next leg up, but really sorta wish it was after Christmas instead of so early would make it more sustainable.


    I still worry about a 10-20% correction ... no matter what triggers it.
    4 Sep 2013, 10:35 AM Reply Like
  • Politics and DemoPublican silliness aside, I am not so sure the correction has run its course.


    I would agree with TB that waiting to see whether we actually start bombing another Muslim country makes sense at the moment.


    Another bumper sticker I got recently:
    4 Sep 2013, 10:37 AM Reply Like
  • I forgot to mention the upcoming budget and debt limit increase fight. Interest rates rising and bonds like a falling knife.


    To me the stars are just too aligned for a major correction, not the end of the world....but sure would be nice to buy in on the big pullback.
    4 Sep 2013, 10:40 AM Reply Like
  • >SM-


    "Another bumper sticker I got recently:"


    Nietzsche would be proud of that one-
    4 Sep 2013, 11:08 AM Reply Like
  • The problem with buying in on a correction is that we all remember when those earlier corrections bottomed, and then went back up, but the view FROM the middle of a correction is almost always very dark and gloomy, with more downside easy to imagine.


    When I used to buy and hold, my version of timing the market was to wait for really major geopolitical events, estimate the reaction, and then sell off and wait for the reaction to push the markets down. I sometimes was able to buy at or near the bottom, but sometimes it was on the up or down slope instead. Long term the strategy worked when I could count on the politicians to get us mired in misery on a regular basis... A remarkably easy thing to predict, as it turns out.


    True contrarians love to calmly place their bets while wading in blood hip deep, when the rest are scrambling screaming out the door... It takes a strong stomach, though.
    4 Sep 2013, 12:41 PM Reply Like
  • >LT-


    I dropped (MKND) last week amid the turmoil. It has a great story but there is manipulation at work IMHO. Took a significant hit- 40%.


    I have a large position in (NVAX) and believe it will improve as we go along. My average cost is $2.07 so I have a 60% profit right now and I'm not selling. As we speak I am attempting to write April calls on my holdings, Going for the 6s of 4/14. Order is in.
    OG recently wrote 5s of 4/14.


    I also have (INO) which is up 50% from purchase- Another good story.


    I am looking into other areas of frontier growth, possibly New Zealand, Malaysia and Vietnam.


    Hope this helps.


    9 Sep 2013, 10:58 AM Reply Like
  • We are in NVAX at about the same price, I am holding and added some lately.


    MNKD is in a bind on the market cap thing. Of course it had to be BOA that put the nail in the coffin with a downgrade just as the stock was recovering and broke thru $6, therefore I believe your guess of manipulation is correct. Someone doesn't want this drug approved or the stock to go up.
    9 Sep 2013, 01:35 PM Reply Like
  • I suspect that it is not that they do not want Afrezza approved, but that they want the price to drop first, so they can get in cheaper before it gets approved.


    Holding strong on (MNKD).
    9 Sep 2013, 02:25 PM Reply Like
  • For what it's worth I feel that the best opportunities will be in Emerging and Frontier markets. They have been hammered down more than most recently since they didn't have the fed at their back but a look at their balance sheets and debt ratings are better than most of the rest of the world.


    As an equity investment take a hard look at (EZJ) Japan index fund. The unending effort to promote growth in Japan resulted in an outright attack on the yen and it's starting to pay off.


    Another area that I feel will perform better than most is South-East Asia's rapidly growing economies. There are many players in this market and the future is far more attractive than in developed cohorts.


    Sri Lanka for one example is quietly growing at a rate in excess of 15% right now and beginning to draw more attention. Jon Springer's work initially got my attention here.


    The billions upon billions of USD pumped into our economy for the last five years has not resulted in confidence that the economy will prosper once the training wheels are removed and on the whole, except for niche plays there are better opportunities elsewhere.
    4 Sep 2013, 11:25 AM Reply Like
  • Agree, WT.


    Still watching (TUR) and (EWS).


    Roller coasters worth a ride, but TUR will be greatly affected by events in neighboring Syria. It is not a happy border at the moment.




    4 Sep 2013, 11:43 AM Reply Like
  • Here is a thoughtful piece about the geopolitics of Syria:



    It does not delve into the Alawite-Sunni-divide aspect of the problem, but does consider Putin's motivations.
    4 Sep 2013, 12:15 PM Reply Like
  • Putin's about face puzzles me, I could see him just backing off and watching, but something has changed for him to participate. ?
    4 Sep 2013, 12:20 PM Reply Like
  • Geopolitics as played by Putin is a game of chess, not a rugby match. We can rest assured that if he sacrifices something in one square, its because he sees advantage somewhere on the board because of it...
    4 Sep 2013, 12:45 PM Reply Like
  • Right now ALL NG supplies in that area are from Russia through Gazprom, the largest producer of NG in the world and maybe even the largest company in the world.


    Assad is in bed with Putin. If the rebels prevail all bets are off and we could see an NG pipeline across Syria providing serious non-Russian competition to Gazprom.
    4 Sep 2013, 12:46 PM Reply Like
  • >SM-


    Nice summation on the mess, thanks-
    4 Sep 2013, 12:49 PM Reply Like
  • It really doesn't matter much to the US which faction emerges victorious in Syria. US interests lie in keeping the conflaguration going for as long as possible, with as many casualties as possible without tottaly destabilizing the entire region or percipitating a broader conflict. Tying down Hezbollah forces in Syria while degrading Syrian forces fit into that. They are too busy to cause much trouble with Israel. Iraq never recovered from the premature withdrawl of US forces and may never do so. Turkey is having an identity crises making it difficult to foresee the investment climate with any clarity. Obama painted himself into a corner and faces a lose/ lose situation. Should congress not authorize the use of force he has limited options most of them bad and has expended much of his political capital. If congress does authorize the use of force he has limited options most of them bad and has expended much of his political capital. While getting congress behind a strike on Syria would be better politically on the domestic front he would then have to carry out such a strike. In order for that to happen he would have to have an OBJECTIVE for the strike and a follow on plan to advance his agenda. Forestalling the use of chemical weapons in Syria without significant degradation of Syrian military capability would be nearly impossible. Bringing down Assad directly through destruction of his military would leave a failed state behind. Alchaeda ellements would be warring with secular Syrians and remnants of the Assad regime. What happens to the stocks of chemical weapons in that scenario? The what ifs are numerous and the certainties few and ugly.
    4 Sep 2013, 02:46 PM Reply Like
  • Its Iraq 2. The movie. With Voldemort standing in for the Shrubbery.


    Hollywood is merging a Republicrat Monty Python script with a Demican Harry Potter (hey, who forgot the kid's glasses?), and predicting a mega boxoffice hit...


    Coming soon to massive riots, er, "crowds" of fans throughout the Muslim world.
    4 Sep 2013, 03:14 PM Reply Like
  • Good news: Facebook page of Syrian rebel group has image of U.S. Capitol burning

    6 Sep 2013, 07:18 PM Reply Like
  • I wonder if there were British soldiers dressed in 19th century uniforms present.
    8 Sep 2013, 11:04 AM Reply Like
  • >SM-


    As you know I was an ardent Turkey fan up until the civil unrest. Until this shadow lifts I will be a watcher- Hoping for a more stable environment.


    The Singapore picture is quite attractive to me. They are what I believe to be a stable entity and their growth is consistent.


    (EWS) definitely worthy of consideration.
    9 Sep 2013, 10:47 AM Reply Like
  • Vote on term limits....check this out.

    5 Sep 2013, 11:22 AM Reply Like
  • JPMorgan to exit student loan business: WSJ
    JPMorgan (JPM +0.7%) is exiting the student loan business, according to a memo seen by WSJ.The bank seems to be quite adept lately at getting out of businesses that have the potential to stir up controversy — the firm announced in July that it would pursue strategic alternatives for its physical commodities business as Wall Street's role in metal warehousing drew scrutiny.Some commentators see a bubble in student debt which now totals in excess of $1T all told.Non-revolving credit (student loans and car loans) has become the main driver behind consumer credit expansion in the wake of the crisis.
    5 Sep 2013, 03:30 PM Reply Like
  • Finally, economists are waking up to how the aging populations of developed nations is effecting monetary policy and economies (remember I posted about this in the QC last year)

    8 Sep 2013, 07:05 AM Reply Like
  • Could this be the long reach of the NSA and CIA?


    Squirrel spy squad arrested in Iran

    8 Sep 2013, 11:05 AM Reply Like
  • SMaturin: Likely so - it's dumb enough. Why dumb? Because the squirrels could be "flipped" with a handful of nuts. :-)) The old story of high-tech weaponry being defeated by low-tech.


    8 Sep 2013, 11:43 AM Reply Like
  • Are you referring to the handful of nuts in Washington or the handful of nuts in Tehran?


    I think they are more than a handful.
    8 Sep 2013, 11:51 AM Reply Like
  • SMaturin: Distilled down to the essential gray matter, likely only a handful?


    8 Sep 2013, 12:03 PM Reply Like
  • Maybe, a latrine full.
    9 Sep 2013, 03:16 PM Reply Like
  • Author’s reply » Mon Sep 9, 2013 - Monte Paschi doubles size of planned capital hike to 2.5 billion euros. From: Reuters, by James Mackenzie and Silvia Aloisi.


    Italy's Monte dei Paschi bank will seek 2.5 billion euros in new capital from investors to shore up its finances, an amount that is more than double its original plan. The size of the capital increase matches the banks current market capitalization. The bank has recently announced thousands of job cuts and closed hundreds of branches all of which are likely to make it difficult to attract new private capital, raising a serious problem for Prime Minister Letta.


    "There's no chance on the planet that they can raise 2.5 billion euros on the market within 12 months. They are heading towards nationalization," Giuseppe Bivona, a former Goldman Sachs and Morgan Stanley investment banker The bank would fall under state control if it cannot raise sufficient funds from shareholders.


    Analysts said the bank's best option to avoid nationalization would be to convert subordinated bonds into shares. This would be in line with the new bail-in guidelines for banks, said Fabrizio Bernardi, analyst at Fidentiis.


    Italy has so far managed to avoid nationalizing any of its banks in the wake of the financial crisis but it has faced heavy pressure from organizations including the International Monetary Fund to strengthen its banking system.
    Given the EU's new bail-in doctrine, this should signal a get out of Dodge signal for current depositors as well. The bank says it plans to reduce its huge government bond exposure that totaled over 29 billion euros at the end of June. My guess is those bonds are carried at book value. No way they will get book value, so their cash needs are going to be even higher as their overexposure to the bonds is liquidated.
    9 Sep 2013, 09:27 AM Reply Like
  • "The bank says it plans to reduce its huge government bond exposure that totaled over 29 billion euros at the end of June".


    Sounds like that plan way back when to make banks use the loans to buy government debt is working out soooo well now.


    9 Sep 2013, 09:45 AM Reply Like
  • Actually, I believe the (real) plan is working precisely according to, er, plan...


    This makes sense so long as one understands the ideological agenda underlying the use of government bond sales to lock up private bank capital. Inevitably the bank finds it cannot swallow the enormous sovereign debt toxic dump, and is swallowed up in a nationalization program.


    The government has pulled down the billions used to purchase their own bonds, and now ends up with the bank as a small addition to the central bank operation.


    So long as the plan was to wreck private banks, bilk investors, and cut down larger depositors, its the perfect storm.
    9 Sep 2013, 10:01 AM Reply Like
  • Another concise EZ piece by Pater. Economic "improvements" are PR noise.

    10 Sep 2013, 03:06 PM Reply Like
  • ECB Banking & Monetary union?





    12 Sep 2013, 01:46 PM Reply Like
  • Goldman says "GOLD below $1000

    13 Sep 2013, 04:54 AM Reply Like
  • LOL, the Squid has no conscience, and is a manipulator among manipulators in the crony socialist/capitalist global order.


    The truth is that the game is rigged, top to bottom, and particularly as it involves American investments of all kinds. The simultaneous (and doubtless very self-serving) announcements from the Squid and the EPA (that is now utterly out of control, embarking on luddite escapades that will crush American mining and industry) are not a coincidence.


    American miners and processors, as a market sector, are an endangered species. I do not invest there.


    COULD we see a simultaneous physical gold supply delivery crunch and an engineered sell-off in gold futures? Absolutely. Could it spike far below production costs and turn most of the world's gold mines into money losing (and quickly mothballed) spider farms? Yes. Could this situation be perpetuated for a brief period of time? Yes. Will it go on for a long time?


    I doubt it very much.


    Its true. You can't fight the Fed(eral Government).
    13 Sep 2013, 08:00 AM Reply Like
  • have a go at this it possible that the vote gets split ?


    Key Merkel ally wins big in Bavaria, junior ally loses badly
    Angela Merkel experienced mixed results in key elections in Bavaria yesterday, just a week ahead of a national poll next Sunday.The Christian Social Union, a sister party of Merkel's Christian Democratic Union, won a landslide with 49% of the vote. However, Merkel's junior coalition partner, the the market-oriented Free Democratic Party, won just 3%Polls suggest that Merkel will be returned to power for a third term, but if the Bavarian results were repeated in the national election, the the FDP would be wiped out out of parliament. That could force Merkel into a coalition with the main opposition group, the Social Democrats.
    16 Sep 2013, 04:52 AM Reply Like
  • I think Mick and Keith said it best:

    16 Sep 2013, 08:03 AM Reply Like
  • I believe that the CSU gained some votes because its very conservative Bavarian core knows what is coming, and is circling their wagons as best they can. The FDP is going to have a rough election, in general, and is likely to be a loser generally, though I think it unlikely that they will do as bad anywhere else. Note that the article did not mention that the CDU lost ground in Bavaria this time around as well.. This will strengthen the CSU quite a bit, but I consider it CDU spin to call this a great victory for Merkel, given that her policies are quite at odds with her "sisters" in the CSU, particularly when it comes to protecting German sovereignty.


    These initial results are also not very indicative of what will happen elsewhere throughout Germany, where the CSU has little power. What no one is doing is projecting that the CDU will see a similar drop in their fortunes as they saw in Bavaria, which I believe IS the case, which of course would be bad news for Merkel, not good.


    This article has a strong taint of spin, imo.
    16 Sep 2013, 08:55 AM Reply Like
  • Looks like Greece is using chemical weapons on protestors. Scroll down to video and go to 2 minute mark.

    16 Sep 2013, 09:04 AM Reply Like


    And so it begins...
    16 Sep 2013, 10:46 AM Reply Like
  • Strong words from the Bank for International Settlements (i.e. BIS or the cabal for global central banks) who concludes that a hunt for yield is luring investors en masse into high-risk instruments, "a phenomenon reminiscent of exuberance prior to the global financial crisis".


    "The BIS [also] quietly scolded Bank of England Governor Mark Carney and his eurozone counterpart Mario Draghi, saying the attempt to use "forward guidance" to hold down long-term rates by rhetoric alone had essentially failed. "There are limits as to how far good communications can steer markets. Those limits have become all too apparent."


    The former BIS Chief Economist who is famous for flagging the gyrations in debt markets before the global storm hit in 2008 said the world has become addicted to easy money, with rates falling ever lower with each cycle and each crisis. There is little ammunition left if the system buckles again. "I don't know what they [Central Banks] will do: Abenomics for the world I suppose, but this is the last refuge of the scoundrel," he said.

    17 Sep 2013, 07:37 AM Reply Like
  • Its always a droll experience to watch the kettle calling the pot "black". Its also informative when these supranational shadow groups poke their snouts from behind the curtain to nip their subordinates (sovereign nations indeed!) back into line.


    The ex BIS economist is unjustly famous, imo, for taking note of the debt markets entering the same tail spin which they were so instrumental in creating in the first place! And he would be an expert as well as to where lies the last refuge of the scoundrel, having inhabited that location for years.


    The currency wars are in full swing, though groups like the BIS are frantically striving to keep their minions in line.


    The greatest fantasy of all is any faith placed in the BIS as a control mechanism for central banks. Like many such groups (the EU springs to mind) its bureaucrats have enormously inflated fantasies about their own ability to control events.


    There is no doubt in my mind that the policies of the Fed are part of this affair. What we still don't know, however, is what is cause and what is effect...
    19 Sep 2013, 08:56 AM Reply Like
  • TB, I think I know where you are coming from in your comment above. But, FWIW I would add a footnote: Chief Economists are often not policy makers and are accustomed to having any of their "divergent" views which don't fit the will of the policy makers -- simply ignored (factual analysis not withstanding.) I don't know the specifics regarding White, so perhaps my observations don't apply. This is just MHO as someone who has worked closely with Chief Economists of large organizations in the past.
    19 Sep 2013, 09:13 AM Reply Like
  • William was never just an ivory tower specialist doing studies for the BIS. He was an executive. He was first a Manager in the Monetary and Economic Department and then Head of the Monetary and Economic Department. His side job during the later years was as Economic Adviser to the BIS. It appears that he was past retirement age when he left, and that he departed for that reason rather than differences over policy.


    However, perhaps I am being overly harsh. I have a very dim view of the entire organization, or even the concept OF the entire organization, and this includes its management team.
    19 Sep 2013, 10:00 AM Reply Like
  • Good perspective TB.
    19 Sep 2013, 10:02 AM Reply Like
  • Author’s reply » Fed Shock Pushes Euro Money Market Rates Lower
    From: Reuters, By: Marius Zaharia September 19, 2013


    Euro zone money market rates fell to six-week lows on Thursday after the Federal Reserve unexpectedly continued its $85 billion-a-month stimulus program, easing pressure on the European Central Bank to relax policy.


    The recent peaks in short-term interbank euro rates were a source of discomfort for the ECB... . However, the Fed may have created other challenges for Draghi because a rising euro/dollar rate could choke recovery by hurting exporters.


    "Whatever they (ECB) say now is a lot more credible because markets won't put it in the context of Fed tapering," said Abhishek Singharia, European rate strategist at Deutsche Bank. "(But) one will have to see what's happening with the FX rate because if the (euro/dollar) is quickly approaching 1.40 they might have to do something about it."
    19 Sep 2013, 08:47 AM Reply Like
  • Watch the Sino/Japanese confrontation brewing over IP lawsuits, market controls, commodity access, and geopolitical squabbles over various islands and lines drawn on maps. These are the shadows cast from Japan's move to monetize their huge debt and preserve the competitive advantages of their industrial giants (primarily the handful of keibatsu).


    The open disagreements are just the shadows cast by the geopolitical kabuki players...


    The Chinese MUST answer the currency gauntlet thrown down by the Japanese when they greatly devalued the yen. This challenge will not go ignored for very long.
    19 Sep 2013, 09:01 AM Reply Like


    Somewhere in Beijing, a small group of very hard old men are planning to change this...
    20 Sep 2013, 11:04 AM Reply Like
  • Abenomics appears to be working- at least a little bit and it is costing the Chinese some money for sure.


    I wonder if the Chinese will attempt to de-value the yuan or simply stop buying from and selling to Japan- Somewhat the same thing I suppose.
    20 Sep 2013, 11:54 AM Reply Like
  • We should find out soon. I believe it will be a multi-pronged attack, starting with some unusual transations on the international bond markets...
    20 Sep 2013, 12:23 PM Reply Like
  • OT....just throwing out some things for feedback and thought on.


    After the Fed not tightening, the following sorta happened and I would like input:
    1. Regional banks sorta tanked, is there any play here? Will they bounce back with the next mention of tightening?


    2. Vix tumbles...
    3. Bonds rise, should one sell on the rally?


    4. MSFT buying NOK and a new CEO coming....this was interesting as NOK sold off after the news and now gained back about a $1 over the high on the news of the sale (typical example of the big boyz on the wrong side of the trade and got to get their money back) I don't have much faith in the "new" NOK.
    MSFT just raised the dividend 22% and a big $40 B buyback. I think MSFT goes higher, maybe alot higher.


    5. APPL....IMO the new phones will surprise to the upside. Maybe push the stock over $500 by year end or Jan.'14


    GE is another one that is slow, but on an upward trajectory.


    I just think there is some low risk - low hanging fruit now and this is just a few ideas, and I'm sure you guys can add to it. IMO, most stocks are too high to speculate on, Bio-tech and penny stocks are already in my portfolio so I'm looking for more stable , dividend paying stocks or something with great growth short term.
    20 Sep 2013, 05:43 AM Reply Like
  • 1. ALL banks outside the 2Big category are hurt by the zirp. As are all senior citizens with savings, all investors past IRA building stage, and our children for generations to come... All so that government can spend beyond our means and social engineer and buy votes to its shrunken, black heart's content.


    The numbers of smaller banks is continuing to decline, and will do this until their business model (which depends on interest rates operating in the real universe, not the crony socialist/capitalist world order fantasyland) begins to make sense once again.


    2. VIX will always react to zirp-on and zirp-off news. Always. Count on it. The DEGREE of reaction will vary, however, given the other news. Some believe it is possible to chart the VIX and predict the future, but I believe not so much...


    3. I distrust long term government debt investments. This reprieve might well constitute a grace period after much fair warning.


    4. I don't like the new NOK either. I also don't like MSFT, which I consider simply "boring" as an investment. They have key, very profitable segments (near monopoly status with Windoze, and oligarchy membership with gaming consoles), but cannot seem to follow Apple's methodology without shooting themselves in the private parts. The last time Microsoft raised their dividend, they borrowed money to do so, despite a huge cash hoard on their books. I have long suspected that MSFT, like many giant multinationals, has most of their money squirrelled away in exotic foreign lands, and it "ain't comin' home". Their dividend performance, in any event, is another sign that they cannot manage to use their resources efficiently.


    5. APPL has been trying to aggressively head off the headlines that they make their stuff in Communist China ("designed in California" ads), and I have for a very long time paid close attention to the ad campaigns of very large companies as a window into their usually hidden reality. This is also an odd problem working against them IN China, where their market depends upon the Chinese viewing them AS a luxury American brand. The danger that both their American and Chinese customers will wake up one morning and realize they are NOT an American company haunts their nightmares...


    I think Apple will have to do more than just address the creative offerings from their competition. Its time for them to move to the next level. Now we see whether or not management can innovate ahead of the curve like Steve could.


    6. GE is becoming a creature of government like the 2Big banks and Government Motors. So long as the markets reward those sitting beside the hand that controls the dollar spigot, they will enjoy success.


    These are the predictable results of the crony socialist/capitalist world order in this middle phase.
    20 Sep 2013, 06:05 AM Reply Like
  • TB, thanks for the reply,


    I agree on APPL totally and the biggest threat is what u mentioned about being neither USA or China, Cook is much more a mfg, supply line & cost cutter CEO. But one new revenue stream could propel the stock. Otherwise it's a dividend payer.


    I disagree on MSFT, I started buying it at $25 +/- and have a nice stake in it at a very nice price vs. today. IMO, it goes higher.


    GE, and any other stock....I could care less if they profit from gov't or political ties. If they make money and go up. I don't like "crony capitalism" either as u know...but it is what it is for now.


    I don't hold any gov't bonds, only corp & tax free muni's but they are being called left and right. It's hard to find a safe income & growth replacement.


    I agree that not much of any company's overseas money is coming home. If it did, it would bankrupt the EZ and developing nations. IMO, no major corp knows where/how to deploy all the cash they have stashed. They are making foolish buybacks and increasing dividends to prop the stock price. Bad IMO in the long run.


    I also don't like "borrowing money" to pay dividends .... MSFT is one and Exxon is another. In fact I am considering dumping XOM & CVX soon on this rally. It's just a matter of time til the increase in mpg on cars and other fuel saving tech cuts into sales. BP is a good example of how just one mistake can make them worth 1/3 of what they are today. XOM has gradually been selling the company off by borrowing to pay dividends and get growth on paper for years. Them lagging now shows this IMO.
    20 Sep 2013, 06:25 AM Reply Like
  • I will add one other thing I left off....utilities really sold off before the tapering rumor. Now they have bounced up about 5%.


    In the past year or so, this has been a good gauge of risk on/off.


    So now I see them inching a bit higher, probably not new highs but up a bit more. I will sell them in the next 30 days as I don't think they can hold gains with tapering still on the table at some time soon.
    I also see this as hedges preparing for a correction. I think we get one soon, or Q1 of '14....and it will blindside most & could hurt bad as in 20% on some stocks. (not all but some) even a 10% correction would sting pretty bad. I think all of this combined with the political battles coming up is why the Fed held tight.
    20 Sep 2013, 06:33 AM Reply Like
  • And the jawboning resumes.

    20 Sep 2013, 12:40 PM Reply Like
  • >LT: Re, "borrowing money to pay dividends".


    It seems to me that, at present low interest rates, it makes sense to borrow money for many purposes. If the "money horde" really is overseas then they would need to "bring it home and pay the freight" to pay US dividends. Interest is cheaper then taxes. My guess is that borrowing makes the books look better short term, and isn't that what corporate finance is all about? The next quarter is vastly more important to bonuses then next year or decade! As long as their credit ratings hold up :-(
    20 Sep 2013, 01:07 PM Reply Like
  • China invests in Portugal.
    It looks like Lisbon Harbor is large enough to allow for any expanded facilities set up by newcomers such as the Chinese, judging from the satellite imagery.
    20 Sep 2013, 02:55 PM Reply Like
  • Pater Tenebrarum has an article on the EU "debtburg". My, but it is big!

    21 Sep 2013, 01:35 PM Reply Like
  • Author’s reply » Merkel Wins Federal Election But Coalition Partner Below Bundestag Threshold: Final Outcome Too Close To Call.
    22 Sep 2013, 01:43 PM Reply Like
  • Thanks FPA. Would appreciate your thoughts on your expected short term policy influence of the new anti-euro party whose growing popularity may edge out the Free Democratic Party in this election.
    22 Sep 2013, 04:33 PM Reply Like
  • Author’s reply » There is an upward trend in the number of people that are not in favor of the EU. The German party is against the EURO, but frankly, if you are against the EURO, you are against many aspects of the EU. I think that trend will increase substantially in the future. Here are my reasons...


    I think there is going to be an uproar when the German people find out that Greece needs more financial aid. I don't believe it's politically possible for the ECB to accept a haircut, so that means more loans will have to be provided or the Greeks will have to default.


    The Germans are on record that more austerity will be required. At the same time, the Greek Dictator has stated that there will be NO new austerity measures. Those two positions are intractable. The likely way out will be attempts to convince the Greek people that new austerity programs are actually not austerity programs, but 'huggy bear" programs or some other ridiculous piece of lying rhetoric like that will no longer fly. . If Greece is not at a tipping point, they have to be close. If they revolt, it means default. and if they default, a lot of people in Europe are going to wake up. Meanwhile, there is also Spain and Italy to deal with. Good luck with Spain.


    I don't believe that Europe's economy is on a sustainable up trend. It was just reported a few days ago (Sept 15th) that EU passenger car sales were off 5.2 percent to 7.84 million compared with the same period last year. That's the lowest January-August figure since the European Automobile Manufacturers' Association started keeping track in 1990. Car sales are one of the major indicators for the health of an industrial economy. I think the poor showing indicates that any recovery is spotty at best, and frankly, I suspect the accuracy of the numbers in close proximity to the German elections. They are politicians, and those people are professional liars.


    The way I see it, the EU is currently a house of cards, and there are many different shocks that can kick out its underpinnings. The key for survival of the EU is to force through the bank union as fast as possible. If they can do that, it’s like a poison pill. Once the bank union is accomplished, it will be hell to reverse it. So that's the line in the sand that the people need to understand and not allow to be happen. Otherwise, a good many future generations are going to have to kowtow to the puppet masters in Belgium.
    22 Sep 2013, 05:40 PM Reply Like
  • Thanks, FPA, for that perspective. Meanwhile the Euro is up against several Asian currencies tonight.
    22 Sep 2013, 08:40 PM Reply Like
  • 42% for the CDU/CSU allies is a good showing, and less than 5% for the Free Democrats and the antiEuro group is expected...


    But I'm wondering whether we might see a new alliance of the two left parties plus the Greens (at 8%, definitely losing ground, which surprises me).


    OK, this is 2 elections in a row where I did NOT get the results right, so my prediction radar is on the fritz.


    We still don't know whether she will attempt to form a stand-alone government based on the around 42% results, or sign on the SPD's as allies (they are playing coy right now, but I think that's just a negotiating tactic).


    I think we will NOT see a "grand alliance", but will see a potential deal with the vulnerable Greens.


    Of course, this also means that now Merkel must address all those nasty constitutional questions about German sovereignty, fiscal unification, and the odd bailout for the PIIGS.
    22 Sep 2013, 08:00 PM Reply Like
  • TB: "my prediction radar is on the fritz"


    Train it on the Gretchen or Angela and maybe it'll work better! :-))


    23 Sep 2013, 06:43 AM Reply Like
  • Author’s reply » The Next Domino:


    The German election is over and now Monte Paschi "Bails In" Bondholders, Halts $650 Million In Coupon Payments


    Monte Paschi commenced a bondholder "bail in" by suspended interest payments on three hybrid notes following demands by EU authorities that bondholders contribute to the restructuring of the bailed out Italian lender. [Who else do you suppose the 'ever trustworthy' EU is demanding to take a haircut in order to minimize loses to EU banks?]


    Monte Paschi will not pay interest on about 481 million euros of outstanding hybrid notes issued through MPS Capital Trust II and Antonveneta Capital Trusts I and II.


    Why these notes? Because hybrid bondholders have zero protections and zero recourse. Under the terms of the notes, Monte Paschi is allowed to suspend interest without defaulting and doesn’t have to make up the missed coupons when payments resume.


    Right now, depositors are untouched. However, with depositor cash on the wrong end of the unsecured side of the liability ledger it's likely only a matter of time before those with uninsured deposits will be subjected to an EU strong-arm Cypriot Embezzlement Ploy.


    While the bank is halting payments on bonds that make up its Tier 1 capital, the most-junior layer of debt capital instruments, it has the equivalent of about 2.6 billion euros of more-senior Upper Tier 2 debt in three issues in euros and pounds. While Monte Paschi is current on these notes, it isn’t clear that it will be able to continue those payments in the future.


    Investors may be betting the bank will buy back the debt “at or slightly below current trading levels,” according to Eva Olsson, an analyst at Mitsubishi UFJ Securities in London.
    I consider Monte Paschi as the "canary in the coal mine" for Italy and its EU relationship. This is why I watch it so closely. I think the current action, in conjunction with Monte Paschi's need to raise massive amounts of capital next year, will initiate a substantial and extended bank-run. As management sees more and more deposits exit, Monte Paschi will bar the doors in order to allow them to steal as much of the depositors money as they can via the EUs Cyprus Embezzlement ploy. I also suspect that all hell will break loose if they attempt a strong-arm Cyprus Embezzlement ploy in a country like Italy.
    23 Sep 2013, 09:38 AM Reply Like
  • FPA: I'm not expecting them to try to steal from the large depositors in Monte Paschi because I believe all those large depositors have already "left the building". If they do announce such a thing, it will be for political reasons (ie, the "eat the rich" crowd is always ready for a snack). But I think this strategy is now non-productive.


    I think they will force the shareholders to take a haircut next. Then the senior debt holders (depending on who they are - there are sufficient different issues to allow them to pick winners and losers, which is a favorite game for these occasions).
    23 Sep 2013, 10:05 AM Reply Like
  • TB, I agree...the true rich and people in the know have already left the building, especially after Cyprus. Political grand standing is all that would be.


    I am NOT a big enough fish to trade in the EZ. One election, or one default overnight and it's all gone.
    23 Sep 2013, 10:31 AM Reply Like
  • Author’s reply » Here is the reasoning for my conclusion:


    First of all, Monte Paschi does still appear to have substantial customer deposits.


    In May 2013 Monte Paschi reported that deposits were “largely stable, despite "media interest" [LOL] surrounding the bank, and they reported that deposits from customers and securities issued fell 0.3 percent from the fourth quarter to 135.3 billion euros in the first quarter.


    While the bank is probably lying about deposit stability, it appears they still have substantial customer deposits and securities on-hand unless their financial reports are a complete tissue of lies.


    Second is the issue of capital controls:
    With a Cyprus embezzlement ploy, all banking customers, large and small, are adversely affected. While small depositors money was not embezzled, the ability to withdraw funds was limited with the imposition of "short duration" capital controls. Capital controls are still in effect today, six months later. Cyprus banks talk about removing the controls early next year, but I doubt they will ever be able to remove them because once they do, there will be a massive bank run. Once trust is gone, it seldom comes back.


    I reason that the ability to have free and unrestricted access to your funds is fundamentally important to banking customers, irrespective of account size.


    Suspending "payments due" on bonds is a clear signal of financial distress. That signal, coupled with the need to raise massive amounts of capital next year, in conjunction with accompanying adverse press, should be sufficient to percolate into the consciousness of even small, unsophisticated banking customers.


    Once customer's suspect their bank might have to implement a Cyprus Embezzlement ploy it seems likely they will correctly conclude that capital controls will follow. I say "correctly conclude" because I think if a bank embezzles some of its customer’s funds, that everyone will say "to hell with that" and "head for the doors". In other words, the Cyprus Embezzlement ploy includes the mandatory imposition of capital controls. If capital controls are not imposed, the bank will immediately fail due to a massive bank run.


    I conclude that the potential of a future implementation of capital controls will cause a significant proportion of those 135 billion in assets to "head to the door", irrespective of whether the funds are insured or not. That's the prudent thing to do.
    23 Sep 2013, 12:22 PM Reply Like
  • I can believe that they still have substantial deposits, but that they are in smaller increments well beneath the individual threshold such as that which was the cutoff point in Cyprus. The only way they can steal from the wealthy who might have deposits above the 120k euro point is if they sneak up on them. This bank is way past being able to sneak up on anyone. Doubtless there are a few elderly widows and orphans they can pick on who just never got the memo, or who are unfortunate enough to have this bank in the role of fiduciary guardian (ha, good luck with that), but the numbers will not be sufficient to generate much loot.


    Capital control laws would have to be passed by the legislature and apply to ALL banks, and I tend to agree, they are coming, but I don't see individual banks possessing that sort of power. I also believe we will see attempts by Brussels to create early (relatively weak) EU-wide capital controls as well, though they will probably fail ratification due to lack of support from northern members of the group. This failure will probably be one of the bricks from which fiscal unification arguments are built...


    WHEN it becomes evident that capital controls are imminent (far from this still, I think), and/or that fiscal unity looks to actually have a chance of becoming the glue that the elites hope will weld the EU permanently together into a US of E, THEN the capital flight will accelerate a great deal.
    23 Sep 2013, 12:35 PM Reply Like
  • If I had to place a bet on this matter, I would hazard some coin that Monte is already on the fast track to nationalization, and that we are seeing just the formal dance necessary to make that happen. The low quality notes getting their lumps (I really have to wonder who was buying such things, given the lack of protection or guarantees of any kind) are just the first position in the nationalization minuet. Next the shareholders and senior debt holders get trimmed, then a final deal is struck for nationalization.
    23 Sep 2013, 12:41 PM Reply Like
  • Trip, could it be that the Italian government is already buying some (most?) of the low quality notes?
    Seems a probable lead-up to nationalization; i.e. "We already own a significant portion of Monte Paschi".
    23 Sep 2013, 01:05 PM Reply Like
  • Author’s reply » So you don't see the possibility of a bail-in to solve the lack of funds problem. What do you see as the alternative Trip?
    23 Sep 2013, 01:24 PM Reply Like
  • Author’s reply » Wouldn't they need to implement capital controls in the event of a nationalization?
    23 Sep 2013, 01:36 PM Reply Like
  • I have always viewed nationalization AS a form of capital control, but other than that, no, I don't believe their laws require a general installation of capital controls just to take over a failed bank (regardless of age, status or size).


    Still, I think capital controls are coming (generally, throughout Europe) as their capital base continues to shrink. This is a natural step on their way to national death, along with shrinking populations, immigration problems (as the vacuum created by shrinking native populations literally "pulls" surplus population from more vigorous cultures such as the Muslims), and a declining standard of living.


    Capital controls are a sign of weakness in the culture and the leadership. Its akin to the process of building walls and immigration barriers to keep citizens IN. Whereas the physical curtailment of human freedom is often recognized for what it is, and resisted, moves to do the same thing to personal possessions and wealth is usually tolerated.


    Recent capital controls installed in the United States (still rather mild, but of growing intrusiveness) are a case in point.
    23 Sep 2013, 01:57 PM Reply Like
  • Author’s reply » Check out what they are thinking of doing in Iceland. It appears they want to use removal of capital controls as a negotiating ploy.


    That goes perfectly with your assessment that the use of capital controls reflects a sign of cultural/moral weakness.
    23 Sep 2013, 02:04 PM Reply Like
  • FPA: Yes. Its important for us to remember that the US has similar guarantees, of similar scale, and for similar reasons. Unlimited guarantees ARE unusual and inherently unstable. Pairing national capital controls (preventing the removal or transfer of funds, particularly out of the country) with an unlimited guarantee just makes the imposition of the capital controls less frightening and risky for the individual whose funds are no longer portable.


    The idea that the guarantees will be removed BEFORE the banking crisis is repaired and the capital controls are canceled is the scary part.


    In this case, it would appear that attempts to repair the banking system have failed, and now they are pursuing the large depositors (over 100k euros) to reduce their problems.


    Given that most of those funds are NOT owned by native Icelanders, and are instead the property of citizens and corporations throughout Europe, its time to harken back to the early days of the Icelandic bank failures when the English, in particular, were very irate about this...


    Last time the British government was a very Left group soft on these issues. This time, we could really see some fireworks.


    This is why just stabilizing the trauma victim is NOT considered the end of the job. A plan to restore them to health is also needed. Since the very beginning of the Great Recession and the global financial meltdown, this has been lacking. Now we see a small sample of what follows the inevitable time when the narcotics wear off and the pain takes hold once again.
    23 Sep 2013, 02:31 PM Reply Like
  • Author’s reply » Are increases in the proportion of public debt to GDP related to decreases in democracy?


    I saw an interesting article on ZeroHedge yesterday that talked about how the EIU Democracy Index decreased for European countries from 2006 to 2012.


    That started me thinking about Nigel Farage’s comments on the “EU’s Democratic Deficit” [] and I wondered if there was an association between measured decreases in democratic governance and increases in the amount of public debt relative to a countries GDP.


    In other words, I hypothesized that the issuance of public debt with lots of ‘freebee’ social programs, in effect, becomes like an addictive narcotic that dulls the publics mind while political power shifts from a democratic process to leadership by the financial institutions and for the financial instructions. In other words, large increases in public debt end up being paid for by losses in Democracy.


    I thought that was an interesting concept, so I allowed my self to be side-tracked this morning while I researched it. I decided to start looking at the issue by plotting the change in the EIU Democracy Index by the change in public debt to GDP ratio from 2006 to 2012. I got the debt data from the Wall Street Journal website. Here is the link: []


    As you can see in the chart ["Are increases in the proportion of public debt to GDP related to decreases in democracy"] that appears at the bottom of the header, negative changes in democracy do systematically decreases as a function of increasing public debt relative to GDP.


    I treated the UK differently because they are not on the EURO. This means they have tighter controls on their currency and likely their debt situation. This suggests that maintaining control of your own currency tends to insulate the public from encroachment on a countries democracy. The ‘Guess Who’ country is the US. I put that point in for comparative purposes.


    I suspect the association is actually stronger because I think Spain’s numbers are fabrications. I suspect their real GDP to debt ratio is closer to Mark Grant’s estimate of 138% [] If the Wall Street journals 2006 number is correct, that would mean Spain’s increase in public debt to GDP was actually around 250% That would put Spain in the same boat as Ireland which I did not plot because they are clear outliers with a percent increase in public debt to GDP of 222%.


    Now this does not prove that the demonstrated association is causal. It could just as well be specious in nature. However, I believe I could perform some additional analysis that could check on the causality of the association. It would take some considerable time to conduct that analysis, and I have another large project on my plate, but if people are interested, let me know, and I will look further into it.
    24 Sep 2013, 04:50 PM Reply Like
  • FPA: Great concept and I suspect the U.S. would be following that scenario. It would be harder to spot until someone downgrades our democracy index, but there might be surrogates that could be used.


    Although we have control of our own currency, our position as a "reserve currency" with lots of others holding our debt, vs. us holding our own, might be an equivalent situation?


    24 Sep 2013, 04:56 PM Reply Like
  • Author’s reply » Excellent observation HT! Yes, I do believe the dollars status as the worlds reserve currency is a special situation I had not thought of.
    24 Sep 2013, 05:02 PM Reply Like
  • Fantastic work, FPA. And I love the concept (probably because it aligns perfectly with my personal ideas).


    I would suggest that the relationship is probably not linear, however. IE, the effect upon individual liberty may well change very little from debt levels of .1 thru 15%, then jump to another energy level, then plateau until 25%, then grow strongly from 26 thru 30%, then plateau at the new level, etc and so on.


    BUT I believe there definitely is a relationship overall.


    In general terms, fascism (as evidenced by the current surge in crony socialism/capitalism showing up in political systems worldwide) starts to displace democratic principals as a decaying democracy mutates toward totalitarianism. That this process also involves increasing deficit spending and spiraling debt is logical, and perhaps all but inevitable.
    24 Sep 2013, 05:58 PM Reply Like
  • I submit one thought. Does giving up your currency cause the decrease in democracy. I suspect the debt is a symptom of the disease. That was the thought that came to mind when I read that ZH article but its just a thought that popped into my head probably transmitted by the copper colander.


    Think Iceland and how they got rid of the debt. They are still on the kroner. Never went to the euro. Lucky for them.
    24 Sep 2013, 06:22 PM Reply Like
  • Author’s reply » Your instincts are correct as always TB... The form of the association even with this small sample is logarithmic in nature.... it's non linear mostly at the start and end of the debt range... I used a linear function because it was the simplest possible to demonstrate the association.


    There is evidence that there are different groups of countries.. for example Germany and Greece are following a different equation... That's why those data points are in back.


    The fitted function only holds for the bright blue points. Do you think its worth pursuing the subject further?
    24 Sep 2013, 07:02 PM Reply Like
  • Author’s reply » That was exactly the reason I included the UK in the chart Guns... I suspected EU countries not using the EURO would be different.


    The results show that the UK, the country not using the EURO actually had an increase in its democracy score even though it had a debt / gdp ratio increase. My reasoning is that countries on the EURO are more integrated into the EU, and therefore subject to more control by the non-elected politicians than countries not so fully integrated into the non democrat fascist EU.


    So far, the results are supporting the theory, and are in alignment with Trips explanation...
    24 Sep 2013, 07:12 PM Reply Like
  • I consider your work on this topic one of the most important things I have read in years. This should be something the Cato Institute grabs and runs with...


    Its worthy of a very serious book, imo.
    24 Sep 2013, 07:25 PM Reply Like
  • Heck, submit it as an SA article and make a little $ off it!


    It's something I've not seen anyone else address and I know that many will find it intriguing!


    Would probably get picked up by the FT or some other widely-read item like one of my early NG-related ones did.


    24 Sep 2013, 08:16 PM Reply Like
  • Author’s reply » Wow... thanks guys!!! As soon as I finish my work on the market model article I will expand this analysis to many more countries and work on the causality issue.
    24 Sep 2013, 08:36 PM Reply Like
  • I totally agree. Deserves to be a SA article miniseries. If you can find some active big caps to include as examples, or ETFs, that would seal the deal. SA likes specific large companies to be listed, it expands the search engine exposure.
    25 Sep 2013, 06:43 AM Reply Like
  • It might be interesting to look at various bourses- compare CAC and DAX to DOW, as examples.
    Excellent, FPA!
    25 Sep 2013, 08:10 AM Reply Like
  • >HTL-


    "Heck, submit it as an SA article and make a little $ off it!"


    Right on point!


    I would think a series of articles on this would be a valuable and widely read and supported venture-


    Go for it FPA!


    25 Sep 2013, 09:58 AM Reply Like
  • Needham downgrades Cypress, defends peers
    Needham's Rajvindra Gill has cut Cypress (CY -15.6%) to Hold in response to its Q3/Q4 warning. However, he also argues the warning shouldn't be seen as a "direct negative read" for mobile IC rivals/peers Synaptics (SYNA +1.4%), Atmel (ATML -2.5%), MagnaChip (MX +0.1%), and Silicon Image (SIMG -0.9%).Gill thinks "end of life actions" for certain Nokia products are hurting Cypress, as are year-end inventory cuts at Samsung, Japanese exposure, and customer push-outs (believed to be from Sony and/or Chinese OEMs). He suspects customer ramp uncertainty and "perceived share loss" to Synaptics will limit 2014 earnings and offset Cypress' operating leverage.Though Atmel continues to trade lower, Synaptics has turned positive after dropping in premarket trading.
    24 Sep 2013, 05:07 PM Reply Like
  • I sustained large losses on CY today. Lost over 100% on options, I bought them back to get out of the position, and down 16% for the day on the stock, but I am down more than that, because I bought it at 12.41 while it was climbing. I didn't sell the stock yet. I figured the action was extreme and it should bounce back a little tomorrow. Also, this was the ex-date for quarterly dividend, but that is only .11 per share, so not much movement is attributable to the divi. Still, the guidance was for lower end, not a loss. I thought the market reaction was overdone.
    24 Sep 2013, 07:13 PM Reply Like
  • Author’s reply » Sorry to see that OG :(


    It has moved up a bit in the after market to 9.76 from the close at 9.65. I think the worry is what the CEO said about the order delay into the first Q of 2014. That's six months of uncertainty... I would do the same thing you are doing... wait a bit and see how far it recovers...
    24 Sep 2013, 07:42 PM Reply Like
  • O.G: Hope they were small positions!


    24 Sep 2013, 08:17 PM Reply Like
  • Thank you for your kindness Rattie and HTL. I thought today was a good rehearsal for what we may encounter within the next two weeks on a much wider scale! It was a rehearsal for running on hot coals...
    24 Sep 2013, 08:37 PM Reply Like
  • Thanks for sharing/updating OG. "Rehearsal for running on hot coals" for all of us -- sums it up well.
    24 Sep 2013, 09:09 PM Reply Like
  • Running on hot coals.


    I saw that in Hawaii OG you might go there and take a few classes. The vacation would be nice so do the training at the end of it. In case you fail the class.
    27 Sep 2013, 11:25 AM Reply Like
  • Volkswagen warns more cost-cutting could be on tap
    Volkswagen (VLKAY.PK) is out with a warning to workers in Germany that it might have to cut costs due to slow sales in Europe.The company has a stated goal of boosting pretax profit margins to 8% this year from 6%.
    24 Sep 2013, 05:07 PM Reply Like
  • VW has a very old and strong relationship with their unions. Even so, this is a trick (cutting wages in order to hit profit margin goals) they can only hope to pull once...
    24 Sep 2013, 06:01 PM Reply Like
  • Volvo aims to cut costs
    Volvo (VOLVY.PK) says it will reduce annual spending by 4B kronor ($620M) in order to boost profitability.As part of its plans, the automaker will cut jobs and look to increase efficiency.
    24 Sep 2013, 05:12 PM Reply Like
  • When the Chinese bought Volvo, I predicted that they would start shifting production capacity out of Sweden and into China after fully assimilating Volvo into their corporate structure... Now we see if I am right.
    24 Sep 2013, 06:03 PM Reply Like
  • Now that the elections are over, corps are putting the screws to Germany with layoffs...see my above posts.
    24 Sep 2013, 05:13 PM Reply Like
  • Corporations have been planning layoffs for several years, particularly since so many European marques have been sold to new Asian owners (who have little patience for spending their money to protect European job programs), but I believe they were quietly asked to "wait" until after the elections. This helped Merkel stay in office...


    GM is likely to restart discussions to sell off and close down Opel, while Ford is already actively moving manufacturing out of Europe to locations like Mexico and Turkey, and even the US.


    With the European markets shrinking rapidly, something has to give...
    24 Sep 2013, 06:07 PM Reply Like
  • Just heard on NPR that 66% of Greek youth under 24 years old seeking employment are unemployed. But, no worries Venizelos says Greece does not require a third bailout it just needs better terms for its current debt! [sarc]
    26 Sep 2013, 08:58 AM Reply Like
  • >MJ-


    Thanks for the Reuters article.


    I loved the piece where Venizelos talks about not needing a third stage bailout-


    "Venizelos said now that the elections were out of the way in Germany, there was the opportunity to talk strategically about Europe's future, and what he deemed the "re-evaluation and the reassessment of our common European destiny.""


    Is that classic politico-doublespeak or what? I don't think they have any intent of complying with their agreements with IMF, ECB or whomever- Kick the can as long as necessary to keep accountability at bay.


    27 Sep 2013, 06:21 AM Reply Like
  • Author’s reply » Here is how I review the situation...
    The Greeks say they can't cut anymore because the people will revolt. The Greek politicians seem to finally understand it's politically impossible for the lending institutions involved to accept a haircut. The Greeks want the lenders to relax the payback period on the loans and reduce the interest rate. This is a typical politicians solution. Reducing the interest rate and extending the loans just sounds like a different kind of haircut to me.


    Merkel says the Greeks must abide by the terms of the loan agreements. The eyes and ears of Merkel, the Trokia, report the Greeks have been dragging their feet on implementation of spending cuts they agreed to. As a result of this non-authorized deviation from the plan, a funding gap in the balance of cash-in and cash out-flows has been created. Merkel says that if the funding gap can't be closed in time, than the Greeks must submit to additional spending cuts.


    The IMF wants the ECB, in other words EU taxpayers, to eat a portion of the debt. This would allow the IMF to be paid back in full, since it also does not want to accept a haircut. Notice that because the IMF does not answer to taxpayers, it has no problem suggesting that taxpayers be robbed. Of course, if the IMF eats it, US taxpayers will likely end up re-financing the IMF. I say to hell with that. We are broke, and its time our government stopped throwing the US taxpayers money down yet another rat-hole, and that's a kind euphemism for Greece.


    I think the Greeks publically suggesting the renegotiation of existing loan terms ended any possibility for them to enter the private lending markets, on any kind of acceptable terms in the near future. And that means Greece is going to need another bailout loan at the end of 2014. Good luck with that.


    I think the IMF has the weakest hand, hence their recent press releases suggesting that the ECB needs to forgive some of the debt owed by Greece.


    I think it is inevitable that the Trokia will demand additional spending cuts to be imposed, and that the Greeks will be dragged kicking and screaming to more rapidly implement the spending cuts they already agreed to make.


    The Greek dictator promised the Greeks no more austerity cuts. I suppose he will attempt to lie his way out of that by claiming that additional cuts are not really cuts. The usual double-speak that dictators resort to when they are caught lying.
    26 Sep 2013, 04:29 PM Reply Like
  • >FPA-


    Fascinating analysis and commentary!


    I think that the Greek leadership is in denial.


    For the US to be the savior of a plainly deceptive Greek government failure to install austerity measures as were already agreed to would be beyond the pale in my view. Your 'rat-hole' analogy is right on point.


    Thanks again FPA for outstanding work-


    26 Sep 2013, 09:15 PM Reply Like
  • Eurozone economic confidence rises, consumer sentiment flat
    Eurozone Economic Sentiment Indicator 96.9 in September vs 95.2 in August and consensus of 96.Business Climate -0.2 vs -0.2 and -0.1.Consumer confidence -14.9 vs -14.9 and -14.5.Industrial confidence -6.7 vs -7.8 and -7.Services sentiment -3.3 vs -5.2 and -4.8. (PR)ETFs - Stocks: EZU, VGK, FEZ, EPV, IEV, ADRU, FEP, FDD, UPV, EPV, DFE, FEU, FEEU. Bonds: EU. Euro: FXE, ERO, ULE, URR, EUO, DRR, EUFX
    27 Sep 2013, 06:48 AM Reply Like
  • BOE chief Carney rules out more QE for now
    Bank of England Governor Mark Carney doesn't believe the BOE needs to restart its bond-buying program, due to the improvement in the U.K. economy."Given the recovery has strengthened and broadened, I don't see a case for quantitative easing and I have not supported it," Carney told the Yorkshire Post regional newspaper. However, the BOE would consider more QE should the economy falter.The pound is +0.1% at $1.6063, although that's down from earlier highs. The FTSE is -0.3%.ETFs - Stocks: FKU, EWU, EWUS, DXPS. Currency: GBB, FXB.
    27 Sep 2013, 06:49 AM Reply Like
  • Coup in Greece possible? Looks like the politicians are running out of room to maneuver.

    27 Sep 2013, 11:29 AM Reply Like
  • Author’s reply » (September 28, 2013) Berlusconi's ministers resign from Italian government
    By: Catherine Hornby and Antonella Cinelli


    (Reuters) - Italian leader Silvio Berlusconi pulled his ministers out of the ruling coalition on Saturday, effectively bringing down the government of Prime Minister Letta.


    Late on Friday, the cabinet failed to agree on fiscal measures to bring the budget deficit within European Union limits.


    Italy's borrowing costs hit a three-month high at an auction of 10-year bonds on Friday, while the premium investors demand to hold Italian government debt rather than German paper widened to about 267 basis points from under 250 at the start of the week.


    Meanwhile, adding to the fun and games reported by Guns in Greece, we have this breaking news..


    (September 28, 2013) Greek police arrest leader, lawmakers of far-right Golden Dawn. By: Deepa Babington


    (Reuters) - Greek police arrested the LEADER and more than a dozen senior members and lawmakers from the far-right Golden Dawn party on Saturday after the killing of an anti-fascist rapper by a party supporter triggered outrage and protests across the country.
    28 Sep 2013, 03:11 PM Reply Like
  • Author’s reply » What do you think? Was that Greek Special Forces call for the government’s resignation (noted by Guns) linked to the government’s arrest of the Golden Dawn leader and MPs? Causality is all about pre-cursor or simultaneous events. The timing is suggestive...
    28 Sep 2013, 05:38 PM Reply Like
  • Author’s reply » FYI: (EPV), (DES2), (BX4), and (XBRMIB)


    These are leveraged shorts of Europe, Germany, France, and Italy,
    28 Sep 2013, 08:25 PM Reply Like
  • Siemens to lay off 15000 in a major restructuring:


    Now the real EZ will emerge after the elections are over. They announced abut 10% of that last week. Look for more EZ corps to follow suit.

    29 Sep 2013, 03:25 PM Reply Like
  • This...



    and this...



    Should help for a bit of the risk-off trade for a bit. 10yr down to 2.60.
    30 Sep 2013, 08:27 AM Reply Like
  • Pater Tenebrarum comments:



    Some recent insight into Italy's economic mess.
    2 Oct 2013, 01:21 PM Reply Like
  • Author’s reply » Italy Senate Panel Recommends Berlusconi Expulsion.
    4 Oct 2013, 12:22 PM Reply Like
  • Politics as usual, Italian style.


    Sometimes they also do "Sicilian" and "Chicago" style.
    4 Oct 2013, 12:53 PM Reply Like
  • Pater strikes again, on France.



    The comments are worth reading.
    4 Oct 2013, 12:52 PM Reply Like
  • Here it comes.


    IMF Has Plans To Impose 10% Tax On Deposits
    10 Oct 2013, 05:21 PM Reply Like
  • That's a WOW! for sure. Think the $US dollar will find some interest as a consequence?


    How will they possibly stem a mass exodus from Eurozone banks?
    10 Oct 2013, 08:15 PM Reply Like
  • Will this include corporations cash deposits ?


    These guys are just asking for a crash that never recovers.
    10 Oct 2013, 08:29 PM Reply Like
  • Problem is that if the EU does this, our benevolent, European loving govt. will probably follow suit.
    11 Oct 2013, 04:25 AM Reply Like
  • This from Carroll Quicley comes to mind.


    Wikipedia link


    "There does exist, and has existed for a generation, an international Anglophile network which operates,
    to some extent, in the way the radical Right believes the Communists act. In fact, this network, which we may
    identify as the Round Table Groups, has no aversion to cooperating with the Communists, or any other groups,
    and frequently does so. I know of the operations of this network because I have studied it for twenty years and was permitted
    for two years, in the early 1960s, to examine its papers and secret records. chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known.
    [The goal is] nothing less than to create a world system of financial control in private hands able to dominate the political system of each
    country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world
    acting in concert, by secret agreements arrived at in frequent private meetings and conferences..."
    -CARROLL QUIGLEY, Tragedy and Hope, 1966
    16 Oct 2013, 02:22 PM Reply Like
  • I noticed on the list of demands on the debt ceiling fiasco that corp tax revision was on the list. No doubt corps want this done. They don't care if the rate is 5% or 50% because they are paying zero now.
    It's the loopholes they are worried about.


    Here is an example, & they are all doing it.


    Google moves €8.8B to Bermuda to keep taxes low
    Google (GOOG) transferred €8.8B in royalty payments to Bermuda last year, a move that cut the company's international tax rates to 5%. That's less than half the levy charged in already low-tax Ireland, where Google records most of its overseas sales.Google, which has attracted the ire of politicians on both sides of the Atlantic for exploiting international loopholes to minimize its tax costs, also makes use of the "Dutch Sandwich," whereby it routes earnings through Holland in order to avoid witholding taxes.
    11 Oct 2013, 04:41 AM Reply Like
  • A very insightful comment on your part, LT...


    Very true, and for many reasons.


    For one thing, even honest corporations that pay every dime they owe are still only acting as paid tax collectors for the government(s). Individual people pay taxes, not corporations.


    Those corporations that exploit every exotic loophole and tax shelter (legal though they may be) are just taking advantage of the byzantine system created by government.


    NOTHING has ever hinted that this system would suddenly become "efficient", and in a crony socialist/capitalist global order, the ability to play the system like a Stradivarius has become the goal of all well-managed companies like Google. They truly have no choice in the matter. If they do NOT master the intricacies of tax manipulation, their competitors will, and drive them out of business.


    How ironic that the powerful economic engines created by capitalism are inevitably subverted by government into masters of playing the tax shell game instead of putting their energies into simply selling their products/services and making money.


    As for using the tax code to "increase corporate taxes", this is just a part of the game. Every such change is another chance, another bite at the apple, for corporations to use political influence (and in any crony-based system, influence IS the system) to carve out loopholes designed just for them.
    11 Oct 2013, 06:26 AM Reply Like
  • I thought we were told that taxes don't affect behavior.
    11 Oct 2013, 11:45 AM Reply Like
  • LOL, I was once told that Santa Claus would bring me a pony, too.


    Still waiting on the pony...
    11 Oct 2013, 11:51 AM Reply Like
  • Author’s reply » ... and I got the product of your pony in a gift box
    11 Oct 2013, 01:27 PM Reply Like
  • jhooper - I thought we were told that taxes don't affect behavior.


    According to researchers at the Centers for Disease Control, a beer-tax increase of 20 cents per 6-pack would reduce gonorrhea rates by 8.9 percent and syphilis rates by 32.7 percent.(17)


    17. Chesson, H., Harrison, P. & Kassler, W. J. (2000). Sex under the influence: The effect of alcohol policy on sexually transmitted disease rates in the United States. Journal of Law and Economics, XLIII:215-238.


    jhooper - I'm neither agreeing or disagreeing with you, just think it's a funny example
    31 Oct 2013, 05:42 PM Reply Like
  • Where and when was this study done. I can not fathom 20 cents per 6 pack having an effect of those stated magnitudes. Must have been done when a six pack of beer cost 50 cents and it must have been done on skid row or some really poor section. LOL
    31 Oct 2013, 07:16 PM Reply Like
  • Well, there is this to consider.


    "Everybody who's not paying taxes or is not paying their fair share of taxes and is being asked to pay more or start paying taxes -- 'it's devastating, it's ruinous, everybody's going to leave the state,'" Dayton said. "I've heard this for 30 years. You've got to tax somebody. So are we going to tax just the few, the middle-income taxpayer and families, or are we going to ask everybody -- businesses and high-income earners as well as everyone else -- to pay a fair share?"



    Let's take a look at Minnesota and see if people are leaving.



    Makes you wonder what sort of economic impact this means.



    There's probably no relation to business friendliess either...



    There not as bad as some of the others, but they are definitely not in the green. There is a reason slaves have to be chained down. Otherwise, they run away.
    1 Nov 2013, 11:04 AM Reply Like
  • Jeffries ups MSFT to a buy: $43 target in 16 months

    15 Oct 2013, 08:24 AM Reply Like
  • Author’s reply » The agreement to cap EU car emissions is being renegotiated due to pressure from the German automotive industry. Germany wants the caps to come into force starting in 2024. The current agreement would have gone into force on September 1, 2014.
    This takes the pressure off on the legally forced implementation of reduced car emission systems. Note BMWs involvement here...
    16 Oct 2013, 06:35 AM Reply Like
  • FPA, I have stated b4 that auto's would do this. IMO, they will get some concessions. This will effect AXPW too if they do. Probably expect rails to get some relief too
    16 Oct 2013, 06:38 AM Reply Like
  • I agree. In American rail, look for the standards to stick (for now) on new locomotives built in 2015, but relax for new locomotives built before, and relax even more for overhauls on existing locomotives (this will be the key test).


    Subsidies for purchasing GE hybrid locomotives will be stupendous, comparable to the $10k direct to the customer subsidies paid for the average Tesla sold in California...


    For big trucks, the hybrid designs (essentially just a way of recapturing regenerative brake energy) will also receive titanic subsidies.


    When these programs are finally announced, all heck will break loose in those manufacturing arenas.
    16 Oct 2013, 01:31 PM Reply Like
  • Centrica to hike British Gas household energy prices by average 9.2%
    U.K. energy supplier Centrica (CPYYF.PK, CPYYY.PK), which owns British Gas, says it will raise household energy prices by an average 9.2% - 8.4% for gas and 10.4% for electricity - beginning Nov. 23, or ~£2/week ($3.20) to the average household dual fuel bill.Centrica is the second big U.K. energy supplier to announce a rise in its prices after SSE last week announced an increase of 8.2%.
    17 Oct 2013, 08:21 AM Reply Like
  • Author’s reply » That's quite an increase... did you see any stated justification LT?
    17 Oct 2013, 08:25 AM Reply Like
  • This has been coming for a while, and in fact was a campaign issue in the last election. Government has been holding down prices via regulatory foot dragging for a long time, until they were actually endangering the infrastructure, which was falling into ruin.


    European prices for energy have been accelerating over the past few years (we have noticed this on these blogs when we took note of the big gap between WTI and Brent oil prices).
    17 Oct 2013, 08:28 AM Reply Like
  • the big increase is why I posted it, I have no idea other than TB's post below.


    Will this somewhat catch on here? Utilities are struggling here and making large investments on several fronts, revenue almost has to follow.
    17 Oct 2013, 08:53 AM Reply Like
  • OT, but I find this on demand for water infrastructure interesting. I still think long term water is a play and a hedge.

    17 Oct 2013, 08:57 AM Reply Like
  • Good article, LT.
    Not mentioned -- but one water infrastructure position I hold long is Mueller Water Products (MWA). They have been a "steady Eddie" grower with 1 yr. returns of 68%. When aging municipal water pipes leak -- MWA often comes to the rescue. And those aging pipes are not going away any time soon given the current state of municipal finances.


    For anyone interested in researching here's what they do: "[MWA] manufactures a broad range of water infrastructure and flow control products for use in water distribution networks, water and wastewater treatment facilities, gas distribution systems and fire protection piping systems. The Company's product portfolio includes engineered valves, hydrants, pipe fittings and ductile iron pipe."
    17 Oct 2013, 10:13 AM Reply Like
  • thanks MJ
    17 Oct 2013, 10:19 AM Reply Like
  • >MJ-


    Thanks for the MWA info. That's the ONE utility related industry that can go nowhere but up- slow and steady.
    17 Oct 2013, 10:24 AM Reply Like
  • I like it a lot. Thanks MJ.
    17 Oct 2013, 12:02 PM Reply Like
  • OT, this could be a play for some of you who follow coal and other dirty forms of energy...I bet this happens just like the author predicts and that would really blow the new EPA rules on power generation.


    Supreme court taking on EPA rule.
    17 Oct 2013, 10:59 AM Reply Like
  • Thanks LT. Good article. Not mentioned is that the Roberts decision also put shackles on the elastic clause. It now has limits by a unanimous vote of the SCOTUS. That may well prove to be the most significant part of the ruling.
    17 Oct 2013, 11:30 AM Reply Like
  • Something to's just a rumor now, but I wouldn't be surprised at this in '14. Especially if Nat gas prices start to increase


    Daily Mail says Chesapeake a rumored target of oil majors
    The Daily Mail passes along a rumor going around earlier that Chesapeake Energy (CHK) could be takeover bait for the likes of BP or Royal Dutch Shell (RDS.A, RDS.B) at ~$40/share.
    Early morning strength in the shares may have been attributed to the rumor, but most gains fell away into the afternoon; shares closed +0.3%.
    17 Oct 2013, 06:31 PM Reply Like
  • Author’s reply » Hmmmmm...
    17 Oct 2013, 07:17 PM Reply Like
  • U.K. plans to split RBS into good and bad banks
    The British government intends to break RBS (RBS) up into a "good bank" and a "bad bank" and will give the go-ahead in the next weeks, Finance Minister George Osborne has said.However, the government won't sell its 81% stake in RBS until after the next election, although it is looking to sell more shares in Lloyds (LYG), this time to retail investors.Blackrock, which was brought in as an adviser, has identified £50-60B of toxic assets at RBS that would be put into a bad bank.
    20 Oct 2013, 05:04 AM Reply Like


    During the second quarter of 2013, disposable income of household and non-profit institutions serving households decreased by 9.3% in comparison with the same quarter of the previous year (33.2 billion euro to 30.1 billion euro). This was mainly due to a decrease of 13.9% in employee compensation and a decrease of 12.4% in social benefits.
    Final consumption expenditures of household and non-profit institutions serving households decreased by 7.6% in comparison with the same quarter of the previous year (35.4 billion to 32.7 billion euro).


    Net borrowing of general government during the second quarter of 2013 amounted to 14.0 billion euro, compared with 3.8 billion euro in the second quarter of 2012. The increase in the General Government deficit in the second quarter of 2013 was due to capital transfers in the context of the program of state aid to specific banks.


    [So net government bowering increased by nearly four times (3.7) to keep certain banks afloat. My guess is the bowered money is coming out of tax revenues...]
    I am surprised they let this kind of information get published.
    22 Oct 2013, 09:56 AM Reply Like
  • Wow. I am surprised too, rat.


    Wow. Just...


    22 Oct 2013, 01:31 PM Reply Like
  • Author’s reply » I wonder....
    26 Oct 2013, 08:19 PM Reply Like
  • When I see these numbers, it literally makes me sick. IMO, this is one of the problems I see with economies everywhere. Companies are spending too much to prop up Wall St. and NOT enough on innovation and support of economies both social and business.


    This was on CNBC home page if you want to read it...I just wonder how much of this ever makes money?


    $3.5 trillion so far, and more ahead for buybacks
    26 Oct 2013, 04:50 PM Reply Like
  • Author’s reply » Nigel Farage - We don't want political union.
    29 Oct 2013, 04:17 PM Reply Like
  • Actually, I believe the full quote (*if he were being absolutely honest) would be:


    "We don't want political union before we get fiscal union."
    29 Oct 2013, 04:30 PM Reply Like
  • How dare he stand for "fair, principled and democratic" in that august body!


    29 Oct 2013, 05:05 PM Reply Like
  • Author’s reply » ? Nigel Farage is against anything that decreases national sovereignty. No way would he be in favor of fiscal union.
    29 Oct 2013, 05:12 PM Reply Like
  • I must have him confused with someone else.
    29 Oct 2013, 05:30 PM Reply Like
  • >HTL-


    Had to LOL at your comment!


    How dare he indeed!
    29 Oct 2013, 05:30 PM Reply Like
  • Rattie I fully agree he would not be in favor of fiscal union. He has been to several sovereign man conventions.


    Nigel and cohorts at the sovereign man convention in Chile.

    30 Oct 2013, 11:25 AM Reply Like


    Euro Gains Seen as ECB Bank Test Sparks Repatriation: Currencies
    31 Oct 2013, 04:44 AM Reply Like
  • I am skeptical about the success they will see drawing capital back into these banks. I realize that is the goal, but I suspect there are loop holes buried in the mice type which will become big enough to allow the Red Army free passage before its done.


    Its been shown how hard it is to PUSH capital through a regulatory straw, whereas how easy it is to PULL capital through a free market highway. When this method underwhelms, perhaps they will give some thought to the other alternative.


    Look for more low interest loan programs to enable key crony banks to meet the new reserve requirements without destroying their foreign asset plans.


    We also still have various Basil initiatives lurking. Treating gold as a Tier One asset is still a relatively unexplored territory...
    31 Oct 2013, 06:56 AM Reply Like
  • "treating gold as a Tier One asset"


    Just wondering how the drop in gold (maybe 50% from the high) with probably more to go will affect balance sheets ?
    31 Oct 2013, 08:25 AM Reply Like
  • LT the drop in bonds should worry them a lot more. Gold will not go to zero.
    31 Oct 2013, 08:35 AM Reply Like
  • LT: The new rules would help any bank with gold on its books due to the current rules posting that gold to the balance sheet at 50% of market value because it is not considered a Tier 1 asset. Regardless of the current price, 100% will be better for the bank than 50%.


    In any event, however, most of the gold is held by the central banks, not the 2Bigs (not surprising, given the 50% rule). It has long been thought that this odd treatment of gold as less of an asset than, say, a late paying mortgage, has been used to prop up fiat currencies. Where it gets interesting is if regulatory changes enable the central banks to generate derivative value from their gold reserves, baselined at 100% of market value. My thinking is that an arcane system of "loans or sales" of gold derivative investments would be opened to select crony banks, and then viewed as adding full value to their bottom line (in effect allowing the central bank to "count" gold assets at their member banks multiple times more than the actual physical gold on deposit).
    31 Oct 2013, 08:38 AM Reply Like
  • Understanding the EZ dilemma in under 9 minutes. From Zero hedge

    31 Oct 2013, 08:42 AM Reply Like
  • Graph of under 25 not working by country in EZ

    31 Oct 2013, 09:33 AM Reply Like
  • Author’s reply » European unemployment rates (most specifically among the under-25 youth of the region) soars to record highs. Across the entire EU, 24.1% of young people are unemployed.


    Spain (having 'exited' its recession the other day) stands at a record 56.5% youth unemployment, topped only by Greece's 57.3% youth unemployment. France and Italy also hit record highs and Cyprus' total unemployment went from 28% a year ago to 43% now.


    Meanwhile, Germany's youth unemployment drops to a 20 year low.
    Everything is working according to plan...
    31 Oct 2013, 10:21 AM Reply Like
  • FPA the short video in my post understanding EZ dilemma in 9 minutes was real interesting and explains the germans still working. They have to sell to the rest of the union after they loan them the money to buy.
    31 Oct 2013, 10:25 AM Reply Like
  • Gerade.


    Germany is installing new signs at all the border crossings:


    ""Arbeit macht frei"


    Maybe they still have some of the old signs they can use.
    31 Oct 2013, 10:31 AM Reply Like
  • I had to look that one up. CRS has gotten severe this past few years.

    31 Oct 2013, 10:35 AM Reply Like
  • Author’s reply » Are you kidding Trip?
    31 Oct 2013, 01:55 PM Reply Like
  • Yes. Sort of.


    Instead of conquering Europe and building concentration camps where people work their lives away for their German masters to finance a program of conquest, this time half of Europe gets to turn itself into a concentration camp and do essentially the same thing to pay back debt.


    I will grant that the living conditions are more comfortable this time around, thus far at least...
    31 Oct 2013, 02:35 PM Reply Like
  • Author’s reply » ok...


    I totally agree with your analogy. Instead of military conquest, we have financial conquest.
    31 Oct 2013, 03:10 PM Reply Like
  • Re: Under 25 unemployment-
    Wonder where the US under 25 number sits.
    31 Oct 2013, 03:25 PM Reply Like
  • WWT: If you can trust it, might be here?



    31 Oct 2013, 03:28 PM Reply Like
  • >HTL-
    Thanks for the matrix-


    I did some calculating and interpolation and came up with the following:


    The 16-19 US age group has 1.25 million unemployed out of roughly 5 million available for about 21% of the group out of work.


    The 20-24 US age group has 2.02million unemployed out of roughly 16 million available- about 13% out of work.


    The interpolated percentage of the combined age group out of work
    Appears to be a little less than 16%, or somewhat lower than the overall UK equivalent age group. The fact that the young in the UK complete school at an earlier age would make more workers available sooner to skew the calculation somewhat I suppose.


    FPA I would more than welcome your comment on this crude analysis of mine.




    EDIT to change EZ to UK
    31 Oct 2013, 05:01 PM Reply Like
  • Author’s reply » Here is how I read the table (these are in thousands)


    Sept 2012:
    Total unemployed 16 to 19 Sept 2012 was 1,378
    Total unemployed 20 to 24 Sept 2012 was 1,913
    Total unemployed 16 to 24 Sept 2012 was 3,291.
    Total unemployed Sept 2012 was 12,082.
    Total employed Sept 2012 was 12,110


    Sept 2012 Percent’s:
    Percent 16 - 24 of unemployed to total unemployed Sept 2012 was 27.2%
    Percent 16 - 24 unemployed to total employed in Sept 2012 was 13.6%
    Percent total unemployed to total employed PLUS total unemployed in Sept 2012 was 49.9%
    Percent part time labor to total part time Plus full time labor was 13.9%


    Sept 2013:
    Total unemployed 16 to 19 Sept 2013 was 1,248
    Total unemployed 20 to 24 Sept 2013 was 2,021
    Total unemployed 16 to 24 Sept 2013 was 3,269
    Total unemployed Sept 2013 was 11,255.
    Total employed Sept 2013 was 11,287.


    Sept 2013 Percent’s:
    Percent 16 - 24 of total unemployed to total unemployed Sept 2013 was 29.0%
    Percent 16 - 24 unemployed to total employed in Sept 2013 was 14.5%
    Percent total unemployed to total employed plus total unemployed in Sept 2013 was also 49.9%
    Percent part time labor to total part time Plus full time was 15.0%


    Year-to-Year Sept 2012 to Sept 2013 comparisons:
    Percent 16 to 24 unemployed to total unemployed increased by 6.6%.
    Percent 16 - 24 unemployed to total employed increased by 6.6%.
    Percent total unemployed to total employed plus total unemployed remained constant at 49.9%
    Percent part time labor force to full time labor force increased by 7.9%.
    31 Oct 2013, 07:27 PM Reply Like
  • >FPA-
    Thanks for putting the numbers together in cohesive form.
    1 Nov 2013, 02:53 AM Reply Like