Hugh Hendry On Europe “You Can’t Make Up How Bad It Is”
01.05.2012
Hugh Hendry (Eclectica Asset Management) delivered his usual eloquent and critical insights on the state of Europe. Beginning with the statement that “All of Europe has defaulted”, he explained that “The political economy in Europe is such that the politicians chose to default on their spending obligations to their citizens in order to honor the pact with their financial creditors and so as time goes on, the politicians are being rejected.” Between France’s election of Mr. Hollande and Luxembourg’s ‘when times get tough you have to lie’ Juncker, Hendry says the only inspiration for Europe is fiction as “you just can’t make up how bad it is” as he goes on to discuss the precedent for a way forward, the grotesque distortions of fixed exchange rate regimes, why Weimar happened, why the transfer union will never happen, Ayn Rand’s reality, and fear politicians are feeling.”
This Time Is No Different – Reflections On 1929 Optimism
When it comes to markets, the following clip, as well as memories of recent market collapses, highlights that it is usually brightest just before it’s pitch black: “As the market floundered financial leaders were as optimistic as ever…”
Waking Up To A Third Consecutive False Dawn For Stocks With Charles Biderman
ZeroHedge writes that it appears we are, as a nation of desperately consuming investors, becoming increasingly cognitively dissonant. Charles Biderman, of TrimTabs, leaves the ominous clouds of the Bay Area for New York City and addresses our seemingly Pavlovian response for the third year in a row to a rising stock market (flooded with portfolio-rebalancing duration-destroying Central Bank money) as evidence that the real economy must be doing great. Of course, relying on tried and true facts such as real job growth and real wage growth and understanding the seasonally-abused-adjusted housing data realities, Biderman notes that the only money driving stocks up is corporate buybacks dominating selling pressure. While modestly bullish on these flows, he is growing more anxious. He sees insider selling surging (from 5:1 January to 14:1 February to 35:1 in March), there has been no new ‘cash-takeovers’ announced this month compared to $15bn per month last year, and the IPO pipeline is ramping up fast (supply will dominate demand) as the end of Operation Twist approaches removing yet another prop to the perceived reality of stocks.
Bunker Hunt And ‘Silver Thursday’
Silver Thursday was an event that occurred in the silver commodity markets on Thursday, 27 March 1980. A steep fall in silver prices led to panic on commodity and futures exchanges. The Hunt brothers had invested heavily in futures contracts through several brokers, including the brokerage firm Bache Halsey Stuart Shields, later Prudential-Bache Securities and Prudential Securities. When the price of silver dropped below their minimum margin requirement, they were issued a margin call for $100 million. The Hunts were unable to meet the margin call, and, with the brothers facing a potential $1.7 billion loss, the ensuing panic was felt in the financial markets in general, as well as commodities and futures. Many government officials feared that if the Hunts were unable to meet their debts, some large Wall Street brokerage firms and banks might collapse.
To save the situation, a consortium of US banks provided a $1.1 billion line of credit to the brothers which allowed them to pay Bache which, in turn, survived the ordeal. The U.S. Securities and Exchange Commission (SEC) later launched an investigation into the Hunt brothers, who had failed to disclose that they in fact held a 6.5% stake in Bache.
Robert Mish: Front-Line Evidence That We are Nowhere Near a Gold Bubble
Robert Mish has been a precious metals dealer for nearly 50 years and knows what a gold bubble mania looks like. We are nowhere near that stage, in his opinion. Instead, he sees a US populace largely unappreciative of holding precious metal as a store of wealth, and engaged in a slow process of dis-hording their gold and silver to eager foreign buyers who are more than happy to take the bullion back to their shores.
Jim Grant Must Watch: “Capitalism Is An Alternative For What We Have Now
Armada Markets primeExchange account spreads on Feb 3, 2012 as the US nonfarm payrolls number comes out
A current spread of 10 in the video equals 1 pip as we display our spreads with 5 digits on EURUSD and others.
Armada Markets supervisory board member Kevin Kerr talking about the price of crude oil and gold on CNBC
Kyle Bass on The Global Economy & Finance Situation – BBC Interview, recorded 15.11.2011
Kyle Bass is a hedge fund founder who saw the financial crisis coming and made a fortune from it – first from America’s sub-prime mortgage crisis and then from betting that Greece would default. Mr Bass told Sarah Montague that Germany cannot be expected to bail out the PIIGS countries – Portugal, Ireland, Italy, Greece and Spain, and that only a massive write-down in those countries’ debts will solve the crisis.
