Business Summary Links By Day
Scandal:
Greece To Receive "Negative" Cash From "Second Bailout" As
It Funds Insolvent European Banks Durden
2-22-12 Earlier today, we learned the first stunner of the Greek
"bailout package", which courtesy of some convoluted transmission
mechanisms would result in some, potentially quite many, Greek workers actually
paying
to retain their jobs: i.e., negative salaries. Now, having looked at the Eurogroup's
statement on the Greek bailout, we find another very creative use of
"negative" numbers. And by creative we mean absolutely shocking and scandalous. First, as a
reminder, even before the current bailout mechanism was in place, Greece
barely saw 20% of any actual funding, with the bulk of the money going to
European and Greek banks (of which the former ultimately also ended up funding
the ECB and thus European banks). Furthermore, we already know that as part of
the latest set of conditions of the second Greek bailout, an 'Escrow Account"
would be established: this is simply a means for Greek creditors to have a
senior claims over any "bailout" cash that is actually disbursed for
things such as, you know, a Greek bailout, where the money actually trickles
down where it is most needed - the Greek citizens. Here is where it just got surreal. It turns out that not
only will Greece not see a single penny from the Second Greek bailout, whose
entire Use of Proceeds will be limited to funding debt interest and maturity
payments, but the country will actually have to fund said
escrow! You read that right: the
Greek bailout #2
is nothing but a Greek-funded bailout of Europe's
insolvent banks... and the Greek constitution is about to be changed
to reflect this! , Would
You Support an Iran War If … : George Washington : 2/22/12 http://albertpeia.com/16reasonswhyonlyfoolssupportswaragainstIran.htm
, Europe's
Nash Equilibrium - A Tightly Stretched Rubber Band? Durden
2-22-12 , Guest Post:
Dangerous Ideas Durden
2-22-12 There is a very clear relationship between economic growth and
sufficient quantities of high quality energy. A crude measure of
energy quality is its price. The lower the price for a unit of energy, the
higher its quality (or net energy), but this is a very crude measure that can
and often is heavily distorted by subsidies, market pressures, and other
factors. As we squint at the world price for oil and note that Brent today
is trading at $120 per barrel, it is clear that this high price is signaling
that energy is now more expensive than it used to be. By adopting the belief
that Peak Oil has been debunked, one runs the risk of missing the larger story that
our current economic model is unsustainable. And that stocks and bonds and
other traditional investments that derive a large portion of their current
value from expectations of future growth simply may not perform anything like
they have in the past. And worse, that recent and continuing
efforts to revive the old economy by printing money risk the destruction
of the money system itself. Given this all-too-human tendency to attempt to
preserve the status quo, in this case by printing money, I must reiterate my
advice to be sure that gold forms a significant portion of your core
portfolio. , Complete
Latest Hedge Fund Holdings Analysis Durden
2-22-12 -The fine folks at Street
of Walls have been kind enough to provide us with their latest 13F
breakdown which looks at the position changes across America's 30 largest and
most important hedge funds. , NAR
Continues Tradition Of Making Mockery Of Itself, Revises December Home Sales
From +5% to -0.5% Durden
2-22-12 And here is yet another reason why we will permanently ignore
the pathologically lying real estate syndicate known as the NAR (link):
December data was just revised from +5% to -0.5% (from 4.61 million to 4.38
million). Since December market expectations were for a +5.2% print, imagine
the sheer horror the algos would have been faced with
had the real number been reported on time. Needless to say, if this number had
been unrevised, the January +4.3% increase would have been a
decline. This way the aglos focused
only on the immediate moment get two months of beats in a row. Huzzah. Anyone
who trades anything based on this borderline criminal self-reporting enterprise needs to have
their head checked. In other news, when will the LIBOR investigation finally
target the NAR? , Why The Core
Needs To Save The Periphery Durden
2-22-12 We have discussed, at length, the
symbiotic (or perhaps parasitic) relationship between the banking system in Europe and the governments (read Central Banks). The LTRO has
done nothing but bring them into a closer and more mutually-reinforcing chaotic
relationship as we suspect many of the Italian and Spanish banks
have gone all-in on the ultimate event
risk trade in their government's debt. It should come as no surprise to anyone
that the bulk of the Greek bailout money will flow directly to the European
banking system and Credit Suisse has recently updated the bank exposure (by
country) to peripheral sovereign debt that shows just how massively dependent
each peripheral nation's banking system is on its own government for capital
and more importantly, how the core (France and Germany) remains
massively exposed (in terms of Tier 1 Capital) to the PIIGS.
Retroactive (negative)
salary cuts may well not be the worst of what is to come as the bankers
deleveraging returns to bite them in a phoenix-like resurrection of sovereign
risk on now even-more sovereign-bloated (and levered) balance sheets. , It's
Official - Greece Unveils The Negative Salary, And A Whole New Meaning For
"Pay To Play" Durden
2-22-12 , Zombie
Housing Market Chronicles - Fed Fails Again To Stimulate A Housing Recovery Durden 2-22-12 While today the
association of real estate advertising agents known as the NAR will tell us
that the home market is improving - an economic observation which we will completely ignore as any data out of the
NAR is now proven to be manipulated and fraudulent, a far better indication of
the ongoing implosion in the housing market, and more importantly - the
sheer powerlessness of the Fed to do anything about it - came out
of the latest weekly Mortgage Brokers Association, which showed that refi applications were down 4.8% W/W, while purchases slid
2.9%, after collapsing 8.4% in the past week. , No, This Is Not Mount
Olympus... Durden
2-22-12 ...This is a chart of the Greek bank stock index, which has gone
from an all out demented euphoria to suicidal depression in 5 days, as the
rumor that Greece is "saved" has been replaced with the reality that
Greece is still "completely broke" ,
Greek 1
Year Hits 763% Durden
2-22-12 , WTF
Did All That Printed Money Go? : ilene
: 02/22/2012 - A riddle, wrapped in a mystery, inside an enema. , Dave’s Daily:
http://www.etfdigest.com MARKETS ARE GETTING TIRED February 22, 2012 ‘Clearly it’s hard for markets to
consistently produce 3%-5% monthly returns without taking a break. This is what
we’re now seeing absent—more positive news. Jobless Claims data Thursday should
shed some light on conditions as will next week’s Employment Report which needs
to verify a better trend in conditions. Gallup
is projecting an unemployment rate in excess of 9% again although they don’t
seasonally adjust like the BS BLS does.We read
yesterday some breathless financial commentators remarking that mutual funds
showed the first positive fund flows since the previous January. That’s a nice
assertion, but January is always a time for people to invest for their IRA or
401K and so forth. Surprisingly ETF fund flow data from the previous bullish
week showed $1.2 billion in outflows for both equity
and bond sectors.Basically, markets are just getting
tired. We’ve remarked to members regarding weekly DeMark
9 count indicators which normally reflect “trend exhaustion”. This is not to
say these counts are perfect and may just indicate some sideways movement
ahead. And, that’s all we may be seeing despite how much liquidity global
central banks are feeding bulls. Meanwhile the SEC’s
Mary Shapiro said she’s worried about HFT (High Frequency Trading).
Worrying isn’t a policy. Wake me when you’re on to something real… , Fitch
downgrades Greece on debt swap plan , Greek Debt Deal
Done—Yeah Right Greg Hunter | I keep asking myself,
when is a deal not a deal?