Hmmm Mar 12 2012
Transcript of Hmmm Mar 12 2012
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THINGS THAT MAKE YOU GO
HmmmA walk around the fringes of nance
12 March 2012 1
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...the Spain which emerged around 1960, beginning withits economic miracle, created by the invasion o tourists,can no longer result in impassioned dedication on thepart o its intellectuals, and even less on the part o or-eign intellectuals JUaN GOYTISOLO
In order to ully realise our aspirations, wemust create in the masses o the people thesense o sacrifce and responsibility thathas been the characteristic o the anarchistmovement throughout its historic develop-ment in Spain. Frederica Montseny
It is we the workers who built these palaces and cieshere in Spain and in America and everywhere. We, theworkers, can build others to take their place. And beerones! We are not in the least afraid of ruins Buenaventura Durruti
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Well, I promised you whenwe lst met tt I would NOT be tlking bout
Greece this me and, I am going to be true to
my word. Today, we are going to discuss two
topics that have been on my mind recently but
that the good folks of the Hellenic Republic and
their capve audience in Brussels have man-
aged to shunt from the introducon of Things
That Make You Go Hmmm....., but that remain
sources of connual fascinaon and consterna-
on for me; Spain and oil ahhhh NUTS! They did
it AGAIN.... ok...the Greek restructuring. It s not
as though I could ignore it, now, is it?
Oil can wait unl next me.... no doubt itll be
an issue then too.
So Lets begin with Spain.
Spain is a problem. A real problem.Greece today triggered the biggest sovereign
default of all me as it reneged on its commit-
ments to pay back investors the 210billion it
had promised them - some 2,400 years aer 10
Greek municipalies became the rst sovereign
enes to default when they sed the templeof Delos, birthplace of Apollo.
Greeces debts are ve mes those of Argen-
na when it became the tleholder in 2001
and Greek GDP, which stands at US$305 bil-
lion, qualies it for 32nd place on the list of
the worlds biggest countries - nestled nicely
between Denmark ($310 billion) and the UAE
($302 billion).
Spain is twelh.
Spains GDP of $1.4 trillion, somewhat surpris-ingly perhaps, puts it just behind oil-rich Russia
and Canada and people-rich India. Spain is a big
country. Spain maers.
When the PIIGS rst muscled their way up to
the trough a lifeme ago, the inial diagnosis
was that Ireland, Portugal and Greece neither
maered in the grand scheme of things nor
were likely to get out of hand, but that Spain
and more importantly, Italy, would be REAL
problems if they got sucked into the morass.
Of course, we were all reassured that both
countries (in fact all of Europe) were in robust
scal health and that we shouldnt count all ourchickens with regards a cascade of defaults:
(Reuters, Jan 19, 2009): European Economic
Aairs Commissioner Joaquin Almunia told
the same news conference that the markets
and credit rang agencies would take a
more posive view of the situaon had they
been at the ministers talks and heard the
extent of the commitment to stable public
nances.
Almunia dismissed a news conference ques-
on about the risk of any country defaulng,
saying conngency planning was not even
an issue in that regard.
But the trouble with chickens is that they have
this annoying tendency to come home to roost
and here we are, three years, several bailouts
and hundreds of billions of euro in cash later
staring down the barrel of the largest sovereign
default of all me.
Last year it was widely accepted that, should
Spain and Italy be pulled into the Europeanmaelstrom, things would take a material turn
for the worse. Conveniently, Marketwatch
laid out ve reasons why Italy, at least, is not
Greece:
1. Italys average debt maturity is much lon-
ger, meaning any rise in yields is not an im-
mediate problem and will take some me
to lter through into Italys debt burden.
2. Italy collects many more taxes than its
debt service costs, even if it hypothecallyhad to pay 7% on all its debt.
3. Its overall debt burden combining
private and public debt is relavely low
compared to developed countries.
4. More than half of Italys debt is held
domescally, which gives the government
a lile more say. For example, bond swaps
can be foisted on domesc instuons.
Domesc instuons can be required to hold
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more government bonds in, say, pension
porolios.
5. Finally, Italy has other sources of
wealth. The country has a whole lot of gold
the fourth highest reserve in the world.
This is generally true of Europe as a whole.
There is great wealth. There is sucient
wealth in Europe in general and Italy in par-
cular to address the debt crisis.
...Italys problem is primarily one of con-
dence not solvency.
But whilst Italy may not look much like Greece,it would be dicult NOT to admit that Spain
bears more than a passing resemblance to the
country currently occupying Wall Street.
Italy may have a high sovereign
debt, but it has a low level of
private debt. It runs a primary
surplus and its scal decit is
actually quite low in comparison
with most major economies. The
completely coincidental buy-
ing of Italian government bondsthat occurred just aer the ECBs
LTRO operaons has meant that
Italian yields, while sll high in
a relave sense, are now at a
level that makes them at least
manageable even if they could
do with being lower. This is great
news for Italy. This is terrible
news for Spain.
Spain is now about to become
the country everyone caresabout all over again and, when
the worlds focus returns to the Iberian Penin-
sula, it will realise that the large, grey shape in
the corner of the room was a Spanish elephant.
When discussing Spain,much of the focus has been on its relavely low
sovereign debt-to-GDP level, which, at roughly
68%, is far lower than that of Italy which stood
at 120% in 2011 (though it has already doubled
since the crisis began in 2008). So far so good.
However, cast your minds back to September
2008 when the Irish government made a deci-sion that ranks as among the very worst since
General Custer said this looks like a nice place
to camp for the night.
(FT.com, Sep 30, 2008): Irelands govern-
ment on Tuesday unveiled a wide-ranging
guarantee arrangement to safeguard the
deposits and debts at six nancial instu-
ons in response to turmoil in the nancial
markets.
The scheme, which guarantees an esmated
400bn (315bn, $567bn) of liabilies, cov-
ers retail, commercial and inter-bank depos-
its as well as covered bonds, senior debt and
dated subordinated debt.
Most depositors were already covered by
an exisng deposit insurance scheme for up
to 100,000. But Tuesdays iniave was
primarily aimed at easing the banks short-
term funding, which had seized up in recent
days.
Shares in the countrys three biggest banks
rose sharply aer the government an-
nounced the immediate start of the scheme,
...
0
20
40
60
80
100
120
20112010200920082007200620052004
Irish Debt-to-GDP
(2004 - 2011)
SOURCE: TTMYGH
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Irish government debt soared from 24.9% in
2007 to 41.8% in 2008 and hasnt looked back
since - reaching 105% in 2011 and necessitat-ing the crippling austerity measures that have
blighted Ireland since 2009.
As manageable as Spains public debt would ap-
pear to be at face value, herprivate debt is n
altogether dierent story - standing at a stag-
gering 227% of GDP and, according to McKin-
sey, Spanish corporaons hold twice as much
debt relave to their output as US companies
and, in comparison to Germany, that number
goes up to six mes (incidentally, Portugal - the
PIIG that nobody cares about - has even worsenumbers with public debt at 93% and private
debt at an eye-watering 249%, - sll as high as it
was at the height of the GFC. Portugal is unsal-
vageable - its just that nobody seems to think it
will maer. It will.)
As Spain reduced its decit inaccordance with the EUs Growth & Stability
Pact, it meant an increasing reliance on private
debt ws needed in ode to polong te eno-
mous construcon boom that had been ongoingin Spain since the 1970s but which really picked
up steam in the 90s and 00s. The outcome of
that reliance? A tripling of average household
debt.
With the die cast, the Zapatero government
was voted out last year and the incoming Rajoy
administraon vowed further austerity would
be implemented in order to bring the decits
under control, but Januarys numbers wouldimply that austerity is anything but the magic
bullet that the policymakers of Europe seem to
believe it to be. When Greg Weldon, dug into
Spains unemployment numbers last month, his
ndings were chilling:
Spains January Unemployment data was
of GREAT interest, revealing the THIRD
LARGEST EVER single-month expansion in
the Number of Unemployed, pegged at
+177,470 ... which represents a MASSIVE
monthly rise equal to +4.0% ... and ... a siz-able +35.6% yr-yr increase !!!
For reference, a populaon-equivalent rise
in US unemployment would be akin to a (-)
1.2 million single month LOSS in Non-Farm
Payrolls.
Further, the oversized January increase was
enough to boost the rolling 12-Month
Change in the Total Number of Unemployed
back above +350,000, as evidenced in the
chart on display [below, le]. Indeed, by thismeasure the Spanish labor market has been
in a recession since the second half of 2007,
and with a re-acceleraon to the upside, this
gauge is back to crisis levels.
Note the acceleraon in the year-year rate
of increase in the Number of Unemployed,
dang back to the spring of last
year:
Jan-12 ... +8.72%
Dec-11 ... +7.86%
Nov-11 ... +7.55%
Oct-11 ... +6.73%
Sep-11 ... +5.20%
Aug-11 ... +4.06%
Jul-11 ... +4.38%
Jun-11 ... +3.50%
May-11 ... +3.04%
We also note that EVERY busi-
ness-industry sector posted an
increase in the Number of Unem-
SOURCE: GREG WELDON
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ployed, which also rose across-the-board in
terms of BOTH sexes, and EVERY age group.
As a result of the oversized seasonal gain in
January, Spains Unemployment Rate seems
set to rise further when 1Q gures are
posted in two months.
Already at a MULTI-DECADE HIGH as of the
last report, for the 4Q (revealing a 22.8%
rate, which violated the previous high of
22.5% set in 1994) ... the gain in Januaryimplies a rise of one-full percentage point,
which would put the Unemployment Rate at
a newer new high of 23.8%, as evidenced in
the chart on display [above].
(You can head to www.weldononline.com to
sign up for a free trial of Gregs phenomenal
work. I cannot recommend it highly enough)
Naturally, against this backdrop of spiralling un-
employment, crippling debt levels in the private
sector and rigid austerity measures, something
had to give. That something? Well, funnily
enough, it was the Spanish governments will-
ingness to play ball with the EU. Ominously, it
was couched in somewhat naonalisc terms
which could be a harbinger of things to come:
(UK Daily Telegraph): Spain is already plan-
ning to breach its budgetary targets, defying
European leaders on the day they signed
their historic scal pact.
Mariano Rajoy, prime minister of Spain, said
the budget decit would be 5.8pc of GDP in
2012 - more than 30pc higher
than the 4.4pc target agreed by
Brussels.
In a move that was heralded in
Spain as deance against the
German-led austerity drive, Mr
Rajoy said he had decided to
set a new target rather than ex-
tract 44bn (36.6bn) from the
budget at a me of economic
crisis. Mr Rajoy said it was now
a sensible and reasonable
target. This is a sovereign
decision made by Spaniards,he said...
Mr Rajoy insisted the slippage was just
on an interim target and Spain would sll
honour its commitment to bringing its decit
down to 3pc of GDP by 2013. But the an-
nouncement was seen as rebung other
European leaders since the gures do not
have to be conrmed unl April.
Ambrose Evans-Pritchard had some thoughts
of his own on the signicance of Rajoys boldmove:
In the twenty years or so that I have been
following EU aairs closely, I cannot remem-
ber such a bold and open act of deance by
any state. Usually such maers are fudged.
Countries stretch the line, but do not actu-
ally cross it.
With condign symbolism, Mr Rajoy dropped
his bombshell in Brussels aer the EU sum-
mit, without rst nofying the commission
or fellow EU leaders. Indeed, he seemed torelish the fact that he was tearing up the
rule book and disavowing the whole EU
machinery of budgetary control.
Right on cue, the leader of Hollands Freedom
Party, an important part of the ruling Dutch
coalion, took up Rajoys baton and sprinted
ahead in surprising fashion:
(UK Daily Telegraph): The Dutch Freedom
Party has called for a return to the Guilder,
becoming the rst polical movement in the
SOURCE: GREG WELDON
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eurozone with a large popular base to opt
for withdrawal from the single currency.
The euro is not in the interests of the Dutch
people, said Geert Wilders, the leader of
the right-wing populist party with a sixth of
the seats in the Dutch parliament. We want
to be the master of our own house and our
own country, so we say yes to the guilder.
Bring it on.
Mr Wilders made his decision aer receiving
a report by London-based Lombard Street
Research concluding that the Netherlands
is badly handicapped by euro membership,
and that it could cost EMUs creditor core
more than 2.4 trillion to hold monetary
union together over the next four years. If
the policians in The Hague disagree with
our report, let them show the guts to hold a
referendum. Let the Dutch people decide,
he said...
The study said the eurozone cannot survive
in its current form. The longer Europes poli-
cians dither, the more costly it will become.
The euro can only survive if it becomes ascal transfer union with naonal sovereign
debt subsumed in eurozone bonds, said co-
author Charles Dumas.
The Dutch have always been Europeans to
the core and staunch allies of the Germans at
the heart of the EU. This is a troubling develop-
ment indeed for the architects of the European
Dream. Throw in Francois Hollandes promise
to renegoate the scal compact if elected
in France when elecons get under way next
month (he is currently leading in early polling)and it becomes ever-clearer that we are a long
way from being out of the woods.
With 50% of Spains under-25s out of work (a
situaon that wont improve for years), s-
ing austerity measures in place that, in order
to meet EU debt limits, will ensure that the
chance of generang any growth in the Span-
ish economy becomes about as likely as Kim
Kardashian refusing to pose for a photograph, it
is obvious that its only a mater of me before
Spain becomes the new Greece. Like Greece,
the trouble will really begin with public sector
strikes, followed by social unrest as the Summerheat hits Southern Europe and end with poli-
cian pandering to angry demands for an exit
from Europe and upheaval.
Uncannily, aer wring that previous sentence
last night, I wake up to this arcle in the FT:
(FT): Spains two largest unions, Comisiones
Obreras and UGT, voted on Friday to call
for a general strike on March 29 against
reforms they called the most regressive in
the history of Spanish democracy.
The labour reforms of Mariano Rajoys gov-
ernment grant employers greater exibility
to pay lower compensaon when they re
workers, a change Mr Rajoy argues is crucial
to increase Spains economic compeve-
ness, but one that has enraged the countrys
unions.
Spain is going to be the country on the front
pages this summer so best get yourselves ac-
quainted with the problems facing it. If it saves
you any me, they are by and large similar tothose faced by Greece - only much, much larger.
Lather. Rinse. Repeat.
Speaking o Greece, Eu-ropes perennial prodigal son, managed to hold
a gun close enough to the collecve heads of
their investors to make them realise that volun-
teering for a restructuring of their outstanding
debt was an extremely smart idea. Aer the
decision by Greece to not pay back a hundred
billion-odd euos tt it d pomised to bond-holders was nally recognised as a default this
week (sigh), and aer a marathon 8-hour ses-
sion ended in the members of the ISDA commit-
tee realising that this constuted a credit event
(8 hours guys? Seriously?) which in turn triggers
roughly $3bln in CDS payments, the terms of
the restructuring will go to the EU to be raed.
The problem is solved. That ought to allow ev-
erybody to breathe a sigh of relief, right?
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of dollars.
Who thinks the upcoming Greek bail-out
will be the last, drawing a line under theeurozones sovereign debt crisis? asked the
senior Euromoney staer chairing the panel.
Put your hands up.
Delivered with a serious demeanour, this
was exactly the right queson. So deadly
was the inquiry, and so germane, that the
mood in the room grew uneasy, barely cam-
ouaged by an outbreak of coughing. Scan-
ning this ultra-inuenal audience, I saw
rows of delegates cowed, keeping their eyes
locked forwards but staring down slightly,
not daring to look elsewhere.
Not a single hand was raised. Not a single
hand among hundreds of the worlds lead-
ing bond market praconers was srred to
support a debt swap now presented as the
key to the world economy shaking o
the post sub-prime torpor and tak-
ing us into the sun-lit uplands
of sustainable global growth.
But perhaps the easiest way to il-lustrate the level of condence in the
Greek soluon is to look at the prices of the
restructured bonds themselves, and for that, I
will yield the oor to my friend John Mauldin
who, in another excellent leer this week had
this to say on the subject:
Greek is having an orderly default. The
taxpayers of Europe are in theory going
to lend 130 billion to Greece to pay back
100 billion in Greek debt that is owed to
private lenders. Greece has to pass several
dicult tests in order to get the money.
100 billion of debt to private lenders will bewrien o. Thus the net eect will be that
they owe 30 billion more. How does this
help Greece, except that they get 30 billion
more they cannot pay?
The new debt is already trading in the
market, even though it has not actually been
issued. (Dont bother traders with messy
details, just do the deal.) This page from
Bloomberg [below, le] is just too delicious
not to print, sent to me courtesy of Dan
Greenhaus of BTIG. It shows the new Greekbonds trading at over a 71-79% discount,
depending on the length of maturity. Note
this is AFTER the 53% haircut already
imposed. That reads to me like the market
value of original Greek debt is now between
12 and 14% of the original face value.
********
So, this weekI d pomised totalk about oil, but instead I will oer you a his-
tory lesson as well as some thoughts on taccs
and strategy in the Straits of Hormuz courtesy
of Louis de Sousa and Ambrose Evans-Pritchard
SOURCE: MAULDIN/GREENHAUS
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on the concept of plateau oil, while Japans
nuclear power staons and the return of the
nuclear lobby also come under the microscope.
Former CEOs of Fannie & Freddie have the
chutzpah to look to the government to pay their
legal fees, margin calls sweep across Europe,
the AIJ scandal has Japans regulator in a spin.
John Mauldin examines the ramicaons of the
ISDA ruling and, of course, theres Spain. Lots of
Spain.
In our charts secon, Je Clark takes a look
at historical volality in the precious metals,
chles hUg-Smit tkes im t te die stte
of student loans in America and RIchard Ross
picks the NASDAQ and the US 10-yr as the focus
for his all-seeing eye.
Jim Grant, interviewed on CNBC last week
shows just why he is the Master, Russell Napier
of CLSA gives a fabulous interview with Jim
Puplava on what happens when credit dies and
edes get to meet good fiend of mine in
the shape of Mr. Simon Mikhailovich as he talks
to Al Korelin.
(incidentally, the real Simon looks nothing like
the picture youll see on page 22).
Tats all rom me fo noteweek aer my whirlwind trip through New York
and Dallas, Texas.
I had very lile sleep, ate too much good food
and met some extraordinary people this past
week and would like to take this opportunity to
thank them all for their hospitality, their me
and for sharing some ideas and views with me.
Truly the best part of wring this leer is the
number of smart, engaged people it brings me
into contact with from all over the world and I
treasure the me I get to spend with each and
every one of them.
I leave you with a cartoon that was sent to me
this week by one of my very favourite readers
and does a beer job of summing up the events
of the past few weeks in seven words and a
picture than I could possibly hope to do in ten
pages.
Until next time.
SOURCE: UNKNOWN
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Contents 12 March 2012
Plateau Oil meets 125m Chinese cars
More bailouts: $200M to defend crisis-era CEOs
Spains sovereign thunderclap and the end of Merkels Europe
European Banks Now Face Huge Margin Calls As ECB Collateral Crumbles
Japan Is Now Another Spinning Plate in the Global Economy Circus
Nuclear Lobby Pushes Ahead with New Reactors
Why AIJ Scandal Will Be The First Of Many
Taccs and Strategy at the Strait of Hormuz
Te ISDa Steps Up
Charts That Make You Go Hmmm.....
Words That Make You Go Hmmm.....
And Finally.....
The Gonnie, Gonnie Banks
# Bank Assets ($m) Deposits ($m) Cost ($m)
13 New City Bank, Chicago, IL 71.2 72.4 17.4
Total Cost to FDIC Deposit Insurance Fund 17.4
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Oil spikes usuallymetastasizeonce energy costs reach 9pc of global GDP. The
longer they stay there, the greater the damage.
That proved to be the pain barrier in the 1970s
and again in 2008, and we are just shy of that
level right now. Oil is already capturing a higher
level of European GDP than in 2008, said Fran-
cisco Blanch from Bank of America.
The rule of thumb is that a 10pc rise in crude cuts
US growth by 0.2pc four quarters later, but the
science is abbily so and nobody knows where
the inexion point lies. The eect is famously
non-linear. Nothing much seems to happenunl con-
dence sud-
denly snaps.
What is
deeply trou-
bling is tt
Brent crude
should have reached fresh records in sterling
(79) and euros (94) - with a knock-on eect
on US petrol prices, mostly tracking Brent -
even though the Internaonal Monetary Fundhas sharply downgraded its world growth fore-
cast to 3.25pc this year from 4pc in September,
and even though Internaonal Energy Agency
(IEA) has cut its oil use forecast for this year by
750,000 barrels per day (bpd).
Oil is not supposed to ratchet deantly upwards
in a downturn, which is what we have with the
Euro zone facing a year of contracon in 2012,
and much of the Lan bloc sliding into full de-
pression. Japans economy shrank in the fourth
quarter.
Asias emerging powers of Asia - the key force
driving the commodity boom of the last decade
- are in various stages of so-landings aer
hing the monetary brakes last year to check
property bubbles and curb inaon. Chinas
manufacturing has been bouncing along near
contracon levels through the winter. So what
happens when it recovers?
The unpleasant fact we must all face is that the
relentless supply crunch - call it `Peak Oil if you
want, or Plateau Oil - was briey disguised dur-
ing the Great Recession and is already back witha vengeance before the West has fully recov-
ered.
The IEA said non-OPEC producon stalled in
2010 and 2011. There was no net increase. While
there was a boost from Canadas tar sands, and
Americas shale-oil, and Brazils oshore rigs,
this was oset by the relentless erosion of the
North Sea elds and Mexicos operaons, a col-
lapse in the Sudan, and Libyas woes.
Meanwhile OPEC spare capacity has fallen to
2.5m barrels a day (bpd), compared to 3.7m this
me last year during the Arab Spring, the event
that caused a comparable spike in crude prices
and arguably triggered the sharp global slow-
down a few months later.
The chain of causality is hotly disputed. A young
professor Ben Bernanke no less wrote the deni-
ve paper in 1997 - Systemac Monetary Policy
and the Eects of Oil Price Shocks - arguing that
policy-makers themselves are the villains be-
cause they over-react.O O O AMBROSE EVANS-PRITCHARD / LINK
Tree years ago, I put fomeFannie Mae and Freddie Mac CEOs Daniel Mudd,
Frank Raines and Richard Syron at the top of the
list of those responsible for the nancial crisis.
Since then, the Securies and Exchange Com-
mission and various class-acon groups have
led lawsuits alleging these former execuves
commied all sorts of accounng and securies
fraud. Sounds great, right? We the people are -
nally geng jusce, right?
Wrong. Guess whos foong the roughly $200
million in legl bills to defend tese lleged
crooks against all those legal acons? You are.
The taxpayers. The same is true of $400 million
that Fannie Mae already paid to sele an SEC
fraud suit. And thats just the tab to date; this
will go on for years and years.
Even worse, this shouldnt be happening. Crony
... What is deeply troubling is thatBrent crude should have reached reshrecords in sterling (79) and euros(94) - with a knock-on eect on USpetrol prices
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federal regulators and execuves appointed by
those same regulators aer the ailing pseudo-
government enes were brought under thefederal governments conservatorship are leng
it happen instead of doing their job of protecng
the American people.
As is typically the case, Fannie and Freddie by-
laws and contracts protect and indemnify com-
pany execuves and directors against ligaon
costs. But thats not the case if execuves or di-
rectors breach their duciary duty -- the duty of
loyalty to the company and its stockholders -- or
engage in intenonal misconduct.
And that just so happens to be what former
execuves are being accused of: overstang in-
come and manipulang prots over a period of
six years to generate more than $115 million in
improper bonuses, and misleading investors by
understang their exposure to risky subprime
mortgages, among other things.
The dilemma, of course, is that as long as the
former execuves maintain their innocence,
neither adming nor denying they did anything
wrong, regu-ltos nd te
CEOs they ap-
pointed to x
this mess say
theyre con-
tractually and
legally obli-
gated to connue to indemnify the defendants.
When the federal regulatory agency FHFA
moved to put Fannie Mae and Freddie Mac un-
der conservatorship in 2008, then FHFA directorJames Lockhart and U.S. Treasury Secretary Hen-
ry Paulson -- both of whom took deep bows for
this sweeping government intervenon -- had
the chance to deny those indemnicaon agree-
ments. The only problem is, they didnt.
So here we are, you and me and all the other
American taxpayers; proud owners of over $5
trillion in quesonable mortgages and securi-
es; prinng more and more money to cover the
$1 trillion plus bailout and execuve bonuses for
these remarkably dysfunconal pseudo-govern-
ment enes.
And the worst part about it is, when the SEC sues
Fannie and Freddie, its essenally suing you and
me, since thats who ends up paying all the pen-
ales, selements, and even the legal fees to
defend the companies and their crooked execu-
ves. In total, thats $600 million and counng.
Hard to believe.
O O O CBS / LINK
Te Spanish rebellion sbegun, sooner and more dramacally than I ex-pected.
As many readers will already have seen, Premier
Mariano Rajoy has refused point blank to com-
ply with the austerity demands of the European
Commission and the European Council (hijacked
by Merkozy).
Taking what he called a sovereign decision, he
simply announced that he intends to ignore the
EU decit target of 4.4pc of GDP for this year,
seng his own target of 5.8pc instead (down
from 8.5pc in 2011).
In the twenty years or so that I have been follow-
ing EU aairs closely, I cannot remember such a
bold and open act of deance by any state. Usu-
ally such maers are fudged. Countries stretch
the line, but do not actually cross it.
With condign symbolism, Mr Rajoy dropped his
bombshell in Brussels aer the EU summit, with-
out rst nofying the commission or fellow EU
leaders. Indeed, he seemed to relish the fact that
he was tearing up the rule book and disavowingthe whole EU machinery of budgetary control.
He is surely right to seize the iniave. Spains
economy will contract by 1.7pc this year under
his modied plans and unemployment will reach
24pc (or 29pc under the 1990s method of count-
ing). To compound this with manic scal ghten-
ing and no oseng devaluaon is intellec-
tually indefensible.
There comes a point when a democracy can no
... In the twenty years or so thatI have been ollowing EU aairsclosely, I cannot remember such abold and open act o defance by anystate
http://www.cbsnews.com/8301-500395_162-57390241/more-bailouts-$200m-to-defend-crisis-era-ceos/ -
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longer sacrice its cizens to please reacon-
ary ideologues determined to impose 1930s
scorched-earth policies. Ya basta.
What is striking is the wave of support for Mr Ra-
joy from the Spanish commentariat.
This one from Pablo Sebasn le me speech-
less.
My loose translaon:
Spain isnt any old country that will allow itself
to be humiliated by the German Chancellor.
The behaviour of the European Commission to-
wards Spain over recent days has been infamousand exceeds their treaty pow-
ers these Eurocrats think
they are the owners and mas-
ters of Spain.
Spain and other naons in
the EU are sick and red of
Chancellor Merkels meddling
and Germanys usurpaon
with the help of Sarkozys
France and their pretended
execuve presidency thatdoes not in fact exist in EU
treaes.
Rajoy must not retreat one
inch. The stakes are high and
the country is in no mood to
suer humiliaons from a
Chancellor who is amassing all the savings of Eu-
rope and wont listen to anybody, as if she were
the absolute ruler of the Union. Merkel and the
Commission should think hard before pung
their hand into the sovereignty of this country
or any other because it will be burned.
This then is the fermenng mood in the ercely
proud and ancient naon of Spain in Year III of
depression, probably the worst depression the
country has seen since the 1640s or have I
missed a worse one?
O O O AMBROSE EVANS-PRITCHARD / LINK
In what could prove to be the most
crical unintended consequence of the ECBs
LTRO program, we note that as of last Friday the
ECB has started to make very sizable margin callson its credit-extensions to counterpares. While
the hope was for any and every piece of lowly
collateral to be lodged with the ECB in return for
freshly printed money to spend on local govern-
ment debt, perhaps the expectaon of a truly
virtuous circle of liquidity liing all boats forever
is crashing on the shores of reality. This De-
posits Related to Margin Calls line item on the
ECBs balance sheet will likely now become the
most-watched indicator of stress as we note
the dramac acceleraon from an average well
under EUR200 million to well over EUR17 billion
since the LTRO began. The rapid deterioraon in
collateral asset quality is extremely worrisome
(GGBs? European nancial sub debt? Papandre-
ous Kebab Shop unsecured 2nd lien notes?) asit forces the banks who took the collateralized
loans to come up with more precious cash or
assets (unwind exisng protable trades such as
sovereign carry, delever further by selling assets,
or subordinate more of the capital structure via
pledging more assets - to cover these collater-
al shoralls) or pay-down the loan in part. This
could very quickly become a self-fullling vicious
circle - especially given the leverage in both the
ECB and the already-insolvent banks that took
LTRO loans that now back the main Italian, Span-
CLICK TO ENLARGE SOURCE: BLOOMBERG/ZEROHEDGE
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/02/20120306_ECB.pnghttp://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100015432/spains-sovereign-thunderclap-and-the-end-of-merkels-europe/ -
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ish, and Portuguese sovereign bond markets.
This huge increase in margin calls can only fur-
ther exacerbate
the sgma at-
tached to LTRO-
facing banks - and
s we noted tis
moning (some-
what presciently)
bot te LTrO-
S t i g m a - t r a d e ,
that we created,
and the potenal
fo MtM losseson the carry-
tdes tt LTrO
cash was put
to work in could indeed start a vicious circle in
European nancials, just as everyone thought it
was safe to dip a toe back in the risk pool.
What should also start to worry the Germans is
the fact a 37x levered hedge-fund central bank
with EUR3 trillion balance sheet that has ex-
tended credit in a risk-managed approach on
what appears to be an ever dwindling supply ofperforming collateral is starng to see dramac
gaps in its asset-liability exposure (but rest as-
sured Bernanke told us that our FX Swaps are
safe as houses).
One lst point sould be noted - te opes of
an LTRO3 or some such are surely now out of
the window as clearly banks have run dry of any
and all reasonable collateral or can the sovereign
bonds purchased using LTRO1 and LTRO2 funds
be lodged once again in a rehypothecated mi-
asma circling the drain?
O O O ZEROHEDGE / LINK
At the circus, you are somemestreated to the spinning plate act where a per-
fome ties to keep n impobble numbe of
plates spinning at once, racing from one plate
to the next as their wobbles indicate the need
for another dose of momentum. Considering the
numbe of spinning nd wobbling pltes tt
our central planners are managing, its easy to
be both amazed and anxious at the same me.
The dierence between the spinning plate anal-
ogy and real-world economic and nancial sys-
tems is that if a failure occurs out in the real
world, it has a very high chance of spreading
across and through the other elements of the
system. Contagion is the fear, as if in nally top-
pling, one plate will crash into its neighbor and
set o a chain reacon of falling plates.
To carry this metaphor, Japan is a wobbly plate.
For those who are in a hurry today, the boom
line is tt Jpn is in seious touble igt nowand is a top candidate to be the next black swan.
Here are the elements of diculty that concern
me the most, each one serving to reduce Japans
economic and nancial stability:
The total shutdown of all 54 nuclear plants,
leading to an energy insuciency
Japans trade balance is in negave territory
for the rst me in decades, driven largely
by energy imports
A budget decit that is now 56% larger thanrevenues (!!)
Total debt standing at a whopping 235% of
GDP
A recession shrinking Japans economy at an
annual rate of 2.3%
Renewed eorts underway to debase the
yen
As I wrote a shortly aer the earthquake in
March 2011, Japan is facing an economic melt-down. If it is not careful, it may well face a cur-
rency meltdown, too. These things take me to
play out, but now almost exactly a year aer the
devastang earthquake of 2011, the dicules
for Japan are mounng -- as expected.
Exacerbated by the earthquake and tsunami, Ja-
pans current predicament has been developing
over many years and represents the aermath of
a burst nancial bubble (involving stocks and real
estate), an inability to let failed instuons actu-
... What should also start to worrythe Germans is the act a 37xlevered hedge-und central bank
with EUR3 trillion balance sheetthat has extended credit in arisk-managed approach on whatappears to be an ever dwindlingsupply o perorming collateral is
starting to see dramatic gaps inits asset-liability exposure
http://www.zerohedge.com/news/european-banks-now-face-huge-margin-calls-ecb-collateral-crumbles -
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ally fail, and repeated and stubborn aempts to
preserve what ulmately could not be sustained.
Where many analysts predicted that the tsunami
would be GDP posive because of the re-build-
ing that would follow, I predicted economic dif-
cules would be the main result due to broken
supply chains, reduced factory output, and in-
creased drag due to rising energy imports.
Japan is like the worlds largest petri dish, and
the experiment at hand is about what happens
to an advanced, industrialized economy when
its electricity producon is cut. As always, our
view is that energy is the master resource. Our
observaon is that complex systems behave in
unpredictable ways when starved for energy, but
direconally, they tend to shrink and simplify.
Electricity is a crical form of energy, and thus
the amount of electricity produced and a coun-
trys GDP are very highly correlated. Sure, there
is always some easy conservaon that can be
done that would allow an electricity shorall to
be met without any serious economic impacts.
Street lights can be turned o, air condioning
and heang can be moderated, and other low-impact conservaon eorts can reduce electric-
ity consumpon without doing much more than
lowering ulity revenues.
However, there is a certain point beyond which
conservaon can do no more and electricity re-
stricons begin to bite into economic acvity.
Plants end up running slower or even shungdown, producvity declines, and work can stag-
nate.
Before the Fukushima disaster, Japan relied on
nuclear power for 30% of its total electricity pro-
ducon. As of March 26, 2012, that number is
going to be 0%.
O O O CHRIS MARTENSON / LINK
Te road to the construcon site isanked by ruins. At one point, theres a churchthat looks like its steeple has been shaved right
o. An icy wind whistles through empty farm-
lands.
The buildings, which are slowly decaying at
the foot of a small hill, are relics of the former
German province of East Prussia. Now they
are located in the eastern part of the Russian
exclave of Kaliningrad, located between Poland
and Lithuania.
At the top of the knoll, three cranes are pivong.
A massive construcon pit comes into view, 20
meters (66 feet) deep and 500 meters long. Visi-
tors can walk down a ramp to reach its boom of
sand-brown dirt.
CLICK TO ENLARGE SOURCE: DER SPEIEGEL
http://www.spiegel.de/international/world/bild-819452-325754.htmlhttp://%20http//www.chrismartenson.com/blog/japan-another-spinning-plate-global-economy-circus/72033 -
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Yevgeniy Vlasenko, the director of the nuclear
power plant that will be built on the site, slips
on his hardhat. With Vyacheslav Machonin, hisconstrucon supervisor, trailing close behind,
Vlasenko heads for a mass of freshly poured con-
crete blocks. All around, workers are bending the
iron rods that will be used in the buildings ring-
shaped foundaon.
The reactor with its fuel rods will rest on top of
this, Vlasenko explains. His construcon super-
visor proudly reports to him that his workers are
mixing 2,000 cubic meters (70,000 cubic feet)
of concrete per hour for the structure. Should
there be a core melt-down, the extremely
ot unium will
dip down nd be
tpped in tis b-
sin. But, of course,
Vlasenko insists that
things will never get
to that point.
Vlasenko doesnt
wnt to spoil te
good mood on the construcon site. Everythingis reportedly going according to plan: In four or
ve years, at most, the rst block of the new Ka-
liningrad Nuclear Power Plant will begin generat-
ing 1,200 megawas of electricity. Then well
sell the energy to Europe, Vlasenko says. In-
cluding Germany.
The gaunt director and his more rotund con-
strucon supervisor cant help but laugh a bit
about the irony of selling nuclear power to Ger-
many, now that it has decided to phase out its
own nuclear power plants by 2022. You used tobuild fantasc nuclear power plants, elegant and
solid, says Machonin, who is now working on
his ninth such construcon project.
Before this project, Machnonin was in the south-
western Iranian city of Bushehr. There, we took
over and nished the Siemens building project,
he says. And we adopted some things from you
there. Both of them shake their heads. How
could the Germans just throw everything away,
asks Vlasenko. Nuclear energy isnt on its way
out; its at the beginning of a renaissance.
O O O DER SPIEGEL / LINK
Japans investment man-agement sector expects more scandalsto emerge as regulatory scruny of the countrys
domesc fund managers intensies.
Last month, Japans Financial Services Agency
(FSA) suspended the operaons of money man-
agement rm, AIJ Investment Advisors, aer it
was unable to account for the bulk of $2.6 billion
in pension funds it managed on behalf of 123 cli-
ents.The suspension follows the $1.7 billion account-
ing scandal at the Japanese camera maker Olym-
pus, which raised quesons about the preva-
lence of white-collar crime in Japan and the
ability of Japanese nancial regulators to moni-
tor oenders.
Japans nancial services minister, Shozaburo
Jimi, last week described the situaon as deplor-
able and ordered a sweeping invesgaon into
the nances of 263 other money management
companies in Japan.
As part of these invesgaons fund management
companies will be required to disclose more in-
formaon on their operaons including whether
they had set up investment trust funds overseas
and whether they use external auditors.
One Tokyo-based fund manager told IFLR the AIJ
incident had revealed the fundamental weak-
nesses at the ground level of Japans pension
fund system.
It has, for instance, become commonplace for
the countrys mid- and small-sized pension funds
to hire only one or two dedicated managers, of-
ten without the necessary skills or professional
background to manage pension funds.
Such hires were oen former employees of Ja-
pans scandal-hit Social Insurance Agency which,
before being abolished and replaced by the Ja-
pan Pension Scheme in 2010, monitored Japans
pension fund policy at the naonal level.
... Japans fnancial servicesminister, Shozaburo Jimi, last
week described the situationas deplorable and ordered asweeping investigation into thefnances o 263 other moneymanagement companies in
Japan
http://www.spiegel.de/international/world/0,1518,819452,00.htmlhttp://www.spiegel.de/international/world/0,1518,819452,00.html -
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For smaller funds, without the means
to hire from big names such as Goldman
Sachs, exemployees of the Social Insur-ance Agency seemed the best opon,
the fund manager said. It was assumed
they would be well qualied to do a good
job.
The regulaons didnt eecvely take
those facts into account, he said. And
the gaps that developed between indus-
try assumpons and the regulatory reali-
ty created room for the AIJ to manipulate
those systemac weaknesses.
O O O IFLR / LINK
About a month ago,when Iranian ocials started venng
the idea of closing the Strait of Hormuz
to commercial trac, Western media
was prompt in reviewing the events of
1981. At that me, Iranian forces mined
the Strait and engaged commercial ves-
sels with rubber speedboats in what was largely
seen as a pathec aempt to control the area.
The media seems to think that Iranian ocialsare talking about using similar taccs today. In
reality, the military technology deployed by Iran
in the region is completely dierent today, cre-
ang a strategic scenario totally dierent from
that of 30 years ago.
According to the EIA, 17 million barrels of pe-
troleum crossed the Strait of Hormuz each day
during 2011. This makes up almost 40% of the in-
ternaonal petroleum market, clearly the most
important choke-point of the world for this com-
modity; on average 28 oil tankers cross the Strait
every day, half of them empty and inbound, the
other half outbound. Adding to petroleum is
liquied natural gas (LNG), exported by Qatar
and the UAE ; over 6 million tones of LNG cross
the Strait every month, about 25% of the inter-
naonal market. All of this trac takes place
very close to Iranian waters and shores.
Iran is a very large country, with an area of almost
1 700 000 km2, more than Spain, France, Italy,
and Germany combined. To its south, Iran has a
coast almost 1700 km long, which makes up all
the north shores of the Persian Gulf (hence thename) and the Gulf of Oman. Along this coast lie
numerous islands of assorted sizes, including Le-
van, Hendorabi, Kish, Forur, Sirri, Abu Masa, the
Tunb twins, Qeshm, Hengrn, Lark, and of course,
Hormuz. All these islands are found west of the
Strait, Hormuz being eecvely the eastern most
of them all. Qeshm is by far the largest of these
islands, with 1490 km2, larger than all the other
islands together. Contrary to what its name sug-
gests, the narrowest secon of the Strait is along
the southeastern shores of Qeshm, between the
smaller islands of Hengrn and Lark. BetweenLark and the smaller isles of Oman, there are
less than 40 km of water. Sovereignty over the
Strait waters is divided by Iran and Oman. The
noten lf is sllowe nd less suitble fo
large vessel navigaon. Being deeper, the Omani
half provides for the narrow naval corridors that
make up what has been for centuries one of the
worlds most important commercial routes.
O O O THE OIL DRUM / LINK
SOURCE: WIKIPEDIA
http://www.theoildrum.com/node/8956#morehttp://www.iflr.com/Article/2991926/Corporate/Why-AIJ-scandal-will-be-the-first-of-many.html -
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Te ISDA (the InternaonalSwaps and Derivaves Associaon) declared
today that Greece is in ocial default. This is a
derivaves-industry commiee of 15 members,
represenng the largest banks and derivave
buyers all the usual suspects. I started to write
last week about their hesitancy, but it was very
technical and I thought it likely they would issue
the ruling they did this week. There are a few
things we should note about this decision.
First, there is a widespread misunderstanding
that the ISDA is the nal answer to whether
a naon is in default. The correct answer is, itdepends. Credit default swaps are contracts be-
tween two private pares . The actual original
contract is the governing document. While most
contracts named the ISDA as the nal arbiter of
default, there are many that did not. Some ex-
pets told tei
clients there
ws poblem
with choosing a
self-inteested
industry group
to be the naljudge, and were very specic in their contracts
as to what constuted a default. (Thanks to
Janet Tavakoli, who spent an hour late one night
paently explaining the arcana and minuae
of credit default swaps. She literally wrote the
book and not just one but three of them on
swaps.)
It does not take a nance major to understand
that if you do not get your money paid back to
you, there was a default of some kind. If the
ISDA had not conrmed a default by
Greece, they would have ceased to be relevant
in any future contracts that were wrien. It will
be interesng to see how contracts are struc-
tured in future.
Secondly, the number that keeps showing up
in the press is that there are only $3 billion
of credit default swaps on Greek debt. That is
only half true. The reality is that there is a NET
$3.2 billion of CDS on Greek debt. The total or
GROSS amount of swaps wrien is esmated to
be about $60-70 billion (Dan Greenhaus, Chief
Global Strategist, BTIG). This is in the 4,323 con-tracts that are known about.
Of the net exposure, the loss is likely to be less
than the $3.2 billion, unless Greek debt goes
to absolute zero. But that does not tell the
whole story. For instance, just one Austrian
state- owned bad bank, KA Finanz, faces a hit
of up to 1 billion euros ($1.31 billion) for the
hole Greeces debt restructuring punches in its
balance sheet. That loss, which will be borne by
Austrian taxpayers, is someone elses gain. The
net number means nothing to them they loseit all, over a third of the expected total loss.
Every bank and hedge fund, insurance company,
and pension fund has its own situaon. Care to
wager that the larger banks wont win on this
trade? My bet is that there will be $30 billion in
losses, out of which maybe someone will make
$27 billion in gains.
Will the counterparty that holds your oseng
CDS be able to pay? Will all taxpayers be so ac-
commodang as Austrias? Does anyone thinkthat taxpayers will bail out a hedge fund that
cannot pay its debt, if it sold protecon and has
to default?
Would that it was only a $3 billion loss spread
among the largest losers. That would be trivial
in the grand scheme of things. Will Greece real-
ly stress the system, as it was stressed in 2008?
The answer is, not likely, since European taxpay-
ers have found 100 billion to cover the debt
and the ECB has printed over 1 trillion, which
has postponed any debt crisis for the immedi-ate future. But the queson that we must ask in
a few paragraphs is, how many more countries
will have to restructure their debt?
O O O JOHN MAULDIN / LINK
... It does not take a fnance majorto understand that i you do not getyour money paid back to you, there
was a deault o some kind.
http://www.johnmauldin.com/images/uploads/pdf/mwo031012.pdf -
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Based on our experi-ence, weve been saying for some
me that volality will increase as
the markets ght their way to the
mania phase of this cycle and
that once there, the gyraons will
jump even higher. This call doesnt
exactly require one to go out on a
limb; it makes sense since more
investors will be crowding in and
volality was high in the 1979-80
mania.
First, lets put last Wednesdaysbig plunge in perspecve. Heres
a picture of the daily changes in
the gold price since 2003, based
on London x prices. (This chart is
very busy, but I want to show the
bulk of the bull market in one vi-
sual.)
A 4.8% decline is one of golds bigger one-day movements over the past nine-plus years. But as you
can see, there have been a number of days where gold rose or fell more than 5%. And it exceeded 6%
on ve occasions.
You might think this kind of volality is high and its true. Worse or beer, depending on how yousee things the volality in the underlying commodity is magnied in the related company stocks.
This is why Doug Casey calls mining stocks, especially the juniors, the most volale stocks on earth.
But the thing is, metals volality
has been higher in the past, par-
cularly during a mania.
Heres what I mean.
The following chart documents
golds daily price changes from
1976 through the end of 1980.
Take a look at the jump in volal-ity in 1979-80...
O O O JEFF CLARK / LINK
CLICK TO ENLARGE SOURCE: CASEY RESEARCH
SOURCE: CASEY RESEARCHCLICK TO ENLARGE
http://www.caseyresearch.com/articles/face-volatility?ppref=GRA442ED0312Ahttp://www.caseyresearch.com/sites/default/files/DailyGoldPriceVolatility1976to1980_0.pnghttp://www.caseyresearch.com/sites/default/files/DailyGoldPriceVolatilitySince2003_0.png -
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20.CHARTS THAT MAKE YOU GO Hmmm...
12 March 2012 20
Richard Ross on the NASDAQ & the US 10-yr Treasury [email protected]
SOURCE: RICHARD ROSS
SOURCE: RICHARD ROSS
mailto:rross%40agco.com?subject=Things%20That%20Make%20You%20Go%20Hmmm.....%20mailto:rross%40agco.com?subject=Things%20That%20Make%20You%20Go%20Hmmm.....%20 -
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21.CHARTS THAT MAKE YOU GO Hmmm...
12 March 2012 21
We have a letspretend economy: lets pre-
tend the unemployment rate
actually reects the number
of people with full-me jobs
nd te numbe of people
seeking jobs, lets pretend
the Federal government bor-
rowing 10% of the GDP every
year is sustainable without
any consequences, lets pre-
tend the stock market actu-
ally reects the economy
rather than Federal Reservemonetary intervenon, and
so on.
We also have a lets pretend
educat ion/s tudent- loan
game running: lets pretend
college is worth the invest-
ment, and lets pretend stu-
dent loans are about educa-
on. There are three dirty
lile secrets buried under
the educaon/student-loancomplexs high-gloss sheen:
1. Student loans have lile
to do with educaon and
everything to do with creat-
ing a new prot center for
subprime-type lenders guar-
anteed by the Savior State.
2. A college diplomas value
in the real world of geng a
job and earning a good sal-ary in a post-nancializaon
economy has been grossly
oversold.
3. Many people are taking out student loans just to live; the loans are essenally a form of State
funding a.k.a. welfare that must be paid back.
Weve got a lot of charts that reect reality rather than hype, so lets get started.
o o o CHARLES HUGH-SMITH / LINK
SOURCE: NY FED/BEA
SOURCE: ZEROHEDGE
http://charleshughsmith.blogspot.com/2012/03/our-lets-pretend-economy-lets-pretend.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+google%2FRzFQ+%28oftwominds%29http://charleshughsmith.blogspot.com/2012/03/our-lets-pretend-economy-lets-pretend.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+google%2FRzFQ+%28oftwominds%29 -
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22.
12 March 2012 22
WORDS TH AT MAKE YOU GO Hmmm...
My very good friend Simon Mikhailovich isone of the smartest guys in any room and, mark my words,
the work he is doing at Eidesis Capital is set to make him
one of the most-recognized names in the precious metals
world.
For those of you not fortunate enough to be familiar with
Simon, this interview with another of my good friends, Al
Korelin, will give you an insight into the clarity of his think-
ing. Simon is someone you denitely want to listen to on
this, and for that maer, any subject.
It just so happens that Simon is also a prince of a man.
The photo (le) is the result of a Google search for Si-mons name and will hopefully hasten him sending me a
photo I can use going forward...
Jim Grant is temaster.
That is all there is to to say.
Watch and be educated byone of the nest minds we
have in nance..
(Via zerohedge)
Jim Puplava welcomes Russell Napier, Consultant at CLSAAsia-Pacic Markets. Russell discusses China dumping US treasuries and growing
signs of a private-sector liquidity squeeze in the US. Russell notes that when credit
dies, deaon follows, leading to greater nancial repression.
CLICK TO WATCH
CLICK TO LISTEN
CLICK TO LISTEN
http://www.financialsense.com/financial-sense-newshour/guest-expert/2012/03/09/russell-napier/when-credit-dies-european-liquidity-situation-getting-worsehttp://www.zerohedge.com/news/jim-grant-must-watch-capitalism-alternative-what-we-have-nowhttp://www.kereport.com/wp-content/uploads/0225-2-4.mp3 -
8/2/2019 Hmmm Mar 12 2012
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and fnally
12 March 2012 23
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Regular readers othese pages will be well aware of my love for photographyand todays And Finally..... contains some magnicent lt/sh eect footage from a country
geng a LOT of press out here in Asia.
Ladies and gentlemen, I give you The Next Mongolia - Myanmar.
CLICK TO WATCH
THING S THAT MAKE YOU GO HMMM..... 2012
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24.THINGS THAT MAKE YOU GOHmmm...
As a result of my role at Vulpes Investment Management, it falls upon me to disclose that, from me-to-me,
the views I express and/or the commentary I write in the pages of Things That Make You Go Hmmm..... may
reect the posioning of one or all of the Vulpes funds - though I will not be making any specic recommenda-
ons in this publicaon.
Grant
www.vulpesinvest.com
Grant Williams
Grant Williams is a porolio and strategy
advisor to Vulpes Investment Manage-
ment in Singpoe - edge fund unning
$200million of largely partners capital
across mulple strategies.
In 2012, all Vulpes funds will be opened to
outside investors.
Grant has 26 years of experience in nanceon the Asian, Australian, European and US
markets and has held senior posions at several internaonal investment houses. He
has been wring Things That Make You Go Hmmm..... since 2009
For more informaon on Vulpes please visit www.vulpesinvest.com
http://users/Grant/Library/Caches/Adobe%20InDesign/Version%207.0/en_GB/InDesign%20ClipboardScrap1.pdfhttp://www.vulpesinvest.com/http://www.vulpesinvest.com/http://users/Grant/Library/Caches/Adobe%20InDesign/Version%207.0/en_GB/InDesign%20ClipboardScrap1.pdf