Thursday, December 15, 2011

Guest Post: Plan B For "Breakup"

Submitted by Finance Addict
Plan B For "Breakup"
There were only two questions that mattered, going into the EU summit.
  1. Would leaders at the summit come up with any actions of their own to help end the immediate crisis?
  2. Falling short of this, would any of their actions give enough confidence to the European Central Bank to allow it step up its role and be a lender of last resort to all troubled eurozone countries, but especially to wobbly Italy? In other words, could the conservative ECB now give itself the greenlight to print euros and buy up bonds from the world’s third largest issuer?
The answer to the first question is very clear: NO. There are some rules agreed on forcing countries to have balanced budgets, but also some very sly features that could allow countries to flout these same rules with no fear of retribution. There was very little agreed in the way of promoting growth, which is really the only hope that the troubled countries have of escaping the debt trap. In fact, the austerity and budget measures actually work against growth. Dear Europe, when you find yourself in a hole the first thing is to stop digging.
The answer to the second question is, unfortunately, another question. “Who the heck knows?” Everyone was hopeful last week when ECB president Mario Draghi made some statements that were interpreted as signaling a quid pro quo: a fiscal compact from the EU leaders in exchange for substantial bond shopping on his part. However, on Thursday Draghi said that he was “kind of surprised” at this interpretation. Market participants did a collective facepalm when they heard this.
Very well, then. Time to consider plan B. What if. From Businessweek:
Contingency planning for an unraveling of the [euro] involves cutting investment, moving money to Germany, transferring headquarters to northern Europe from southern, and even going out of business, according to interviews with more than 20 executives.
Here’s a round-up of companies that have disclosed their what-if plans for a Eurozone breakup thus far. And for every one listed here there are who-knows-how-many-others that are unwilling to go on record about such a sensitive topic.
  • British banks. According to Reuters the main banking regulator has told British banks to make plans for the event that there is a disorderly dissolution of the euro or an exit of some countries from the single currency.
  • ABB, engineering company and one of the world’s largest conglomerates
  • Novo Nordisk, the world’s biggest insulin manufacturer
  • Wolters Kluwer, Europe’s largest tax and legal publisher
  • Compass Group, the world’s biggest caterer
  • Kingfisher plc, Europe’s largest home improvement retailer
  • CRH plc, a maker of building supplies and Ireland’s biggest company.
  • Grupo Gowex, a Spanish provider of Wi-Fi services
And companies are not the only ones. The Wall Street Journal made waves when it wrote that the Irish Central Bank was looking at its printing capacity in case it needs to start turning out pounds again. Witness how RTE reports the Central Bank’s studious completely-dodging-the-question-denial: “The Central Bank of Ireland has said it is not printing Irish punts and is only printing euro.”
I dare not predict what will happen next but it looks like lots of folks are planning for the worst.

Horror as Walmart stays open after husband 'stabs wife to death in front of shoppers in the middle of the store'

A South Carolina man has been charged with murder in the death of his wife, who was fatally stabbed inside a Greenville County Walmart this weekend.
But as shoppers looked on in horror, store management roped off the area for homicide investigators and continued to operate as usual.
Avery L Blandin, 46, is accused of killing Lilia Blandin, 38, who worked at the Woodforest Bank inside the discount retail store in Berea.
Scroll down for video
Killed: Lilia Blandin, 38, was working at the Woodforest bank inside Walmart where deputies said her husband, Avery Blandin, stabbed her to death
Killed: Lilia Blandin, 38, was working at the Woodforest bank inside Walmart where deputies said her husband, Avery Blandin, stabbed her to death
Greenville County Sheriff's Office Master Deputy Jenning said police were called to at 1:21pm on Saturday to the Walmart at 6134 White Horse Road, where they found Mrs Blandin with stab wounds.
She was transported to the hospital but died shortly after.
Witnesses told deputies they heard a verbal fight between the woman and a male suspect, which escalated to a physical fight.
Shopper Phillip Tallent told local station WYFF4 he was looking for Christmas lights with his family when the horrifying scene unfolded, and he intervened.
Arrested: Avery Blandin, 46, will be taken to Greenville County Detention Center to await a bond hearing on Monday
Arrested: Avery Blandin, 46, will be taken to Greenville County Detention Center to await a bond hearing on Monday

Mr Tallent to the station he 'When I looked, I could see a couple of stabbing motions, and I really started to run towards the front (of the store).'
He continued: 'I seen it when (the man) was making a stomping motion at (Lilia Blandin) across her chest and neck area. I picked up the chair and I hit him.'
Mr Tallent said a man deputies identified as Avery Blandin ran towards the door with several witnesses failing in attempts to stop him.
He said the man fled the scene after pulling out a second knife.

'That's when I let him go because I already seen what he did with the first one, so I wasn't going to get involved with the next one,' Mr Tallent said.

Scene: Greenville County police were called on Saturday to the Walmart at 6134 White Horse Road, where they found Mrs Blandin with stab wounds
Scene: Greenville County police were called on Saturday to the Walmart at 6134 White Horse Road, where they found Mrs Blandin with stab wounds

Gruesome: Witnesses told deputies they heard a verbal fight between the woman and a male suspect, which escalated to a physical fight
Gruesome: Witnesses told deputies they heard a verbal fight between the woman and a male suspect, which escalated to a physical fight

Tragic: Witnesses told police a male suspect fled the scene after pulling out a second knife at the Walmart in Berea
Tragic: Witnesses told police a male suspect fled the scene after pulling out a second knife at the Walmart in Berea
Deputies confirmed a male suspect fled the scene. Mr Tallent told WYFF4 he was able to get the tag number of the car the man got into and gave it to investigators.
Walmart company spokesman Dianna Gee told Greenville’s News Channel 4 the company is assisting with the investigation and had turned over surveillance video footage from the store.

'We did, as requested, close our grocery checkout area to allow the police to do their work and provide some level of privacy, given the circumstances,' Ms Gee said.
'This was a senseless act of violence, and our thoughts and prayers go out to the victim’s family during this difficult time.'
Mr Blandin, of Simpsonville, was identified and located after the stabbing when he was involved in a traffic collision.

Deputies said Mr Blandin was taken to Greenville Memorial Hospital to receive treatment for injuries and will later be taken to Greenville County Detention Center to await a bond hearing on Monday.

It was not immediately known if he has an attorney.

Watch video here

Is the Gold Bull Really Dead?

Greg Hunter
USA Watchdog

Economist Dennis Gartman announced in his newsletter, yesterday, that he has sold all of his gold. I don’t know if it was physical or paper gold in an ETF (exchange traded fund), but it is gone.

According to Bloomberg, Gartman said, “Since the early autumn here in the Northern Hemisphere gold has failed to make a new high. . . . Each high has been progressively lower than the previous high, and now we’ve confirmation that the new interim low is lower than the previous low. We have the beginnings of a real bear market, and the death of a bull.”  Mr. Gartman thinks so much damage has been done to the price of gold and to market psychology that, in his words, “. . . wholesale liquidation, and perhaps forced liquidation, shall be the outcome.”  (Click here to read the complete Bloomberg story featuring Mr. Gartman’s call on Au.)

I think Mr. Gartman is a trader at heart, but there is a big difference between a gold trader and a gold investor.

Traders are usually looking at the short term, and in the short term, Gartman is probably correct.  The price of gold will probably sell off some more before this move is through, but the gold bull is hardly finished.

I say this because of two main reasons.  Unprecedented global debt is reason number one.  More debt has been created than ever before in human history.  Global over-the-counter derivatives total more than $700 trillion according to the Bank of International Settlements (BIS).  (This is more than a $100 trillion increase from the BIS number from December 2010.)

This is a staggering amount of debt that is more than 10 times the entire world GDP. You cannot “grow” your way out of this kind of leverage.  This is a mostly unregulated dark pool of debt bets with no rules, guarantees or public market.

Dr. Marc Faber of the popular recently predicted one day the entire derivatives market will, “. . . cease to exist and become zero.”   Farber thinks that “global collapse” is coming and “most people will be lucky to still have 50% of their wealth in 5 years’ time.”  That is one big reason to hold physical assets like gold.  (Click here for more from Dr. Marc Faber.)  Gold should be looked at as insurance.  Selling your physical gold now would be like driving your car or living in your home without an insurance policy.

When it comes to Europe and the bank solvency crisis, the euro could disappear, but, then again, don’t think the money printing is over—it’s not.

Dr. Stephen Leeb of Leeb Capital Management said in a recent interview, “So the Germans are really flirting with the same kind of situation that occurred in the 1930s.  If Europe continues to sink and the Germans don’t relent on this stuff, we are going to head for a real deflationary depression.  My big picture is that Merkel and the Germans will allow the printing of money, and once that happens, just as it happened in 2008, once you get a sign, that’s blastoff time for gold.  Gold and silver will shoot up like rockets.  In my opinion, gold will close 2012 at $2,500 or above, probably above.  Gold could easily double from here in the next 12 months if you get the kind of money printing that I expect to happen in Europe.”  (Click here for more from Stephen Leeb.)

Read Full Article


Occupy Endgame: law enforcement arrests 1%’s war & economic criminals Continue reading on Occupy Endgame: law enforcement arrests 1%’s war & economic criminals

The brilliant 2-minute video from Waiting for the Storm at left is a message for police, sheriff, and military law enforcement to arrest US political, economic, and corporate “leadership” who have committed obvious crimes.
Occupy’s endgame, in retrospect, will be obvious: after a period of “emperor has no clothes” expository communication from independent Internet media to the 99% and citizen engagement with those facts, those with arrest authority exercised it to remove criminal leadership from power.
The first criminal arrests will be for War Crimes and financial fraud. The most notable will be “leadership” of both US political parties and from the largest financial institutions involved in mortgage and “investment” frauds.
Importantly, the “criminal 1%” include corporate media who are criminal accomplices to enable and cover-up the murder of millions, deprivation of billions, and looting of trillions of our dollars. Their manipulative voices will be removed from power, quickly facilitating public communication of the objective facts of the depth of state crimes, and the inspirational future humanity enters.
Occupy’s victory means peace from criminal wars based on obvious lies, economic security and sufficiency for 100% of humanity, and unleashing suppressed technologies that transforms what it means to be human into unimaginable status.
As an academic in the fields of government and economics, here are the resources I’ve developed to explain, document, and prove the “emperor has no clothes” obvious facts that require the arrests of US political and financial “leaders”:
US war laws explained, why Afghanistan and Iraq wars are unlawful, how to end them
Are US wars in Iraq and Afghanistan well-intended mistakes? What we now know from the evidence
Open proposal for US revolution: end unlawful wars, criminal economics (4-part series)
Occupy This: US History exposes the 1%’s crimes then and now (6-part series)

Three Stooges Testify about Missing Money at MF Global

From the movie "Three Dumb Clucks"
Greg Hunter
USA Watchdog

I watched in amazement today at the Senate Hearing on the collapse of MF Global about 6 weeks ago.

The three top executives testified about what they knew and when they knew it.  CEO Jon Corzine, COO Bradley Abelow and CFO Henri Steenkamp all sat there and, essentially, said none of them knew where $1.2 billion of segregated customer money went.

It might as well have been Moe, Larry and Curly testifying.

As I watched these three, the basic theme was none of these guys knew what was going on in the company they were paid to run.

I guess they have proof they didn’t know what they were doing because the company they were running went bankrupt.   Corzine said repeatedly, “I never gave any instruction to anyone at MF Global to misuse customer funds.”  If that is not a well-rehearsed legal answer, I don’t know what is.

Other legal words and phrases I heard from the three MF Global executives include: “To the best of my recollection, to the best of my knowledge, I do not recall, and no reason to believe,” just to name a few.

When COO Bradley Abelow was asked the simple question of where did the money go?  Mr. Abelow said, “I do know what happened, and I am awaiting results of the investigation to inform us all.”  What?  So we are awaiting the results of an investigation to find out what these three stooges were paid to know?

The CFO testified that when he knew the company was going down, the regulators were called at around 2 am.  My question is what number did they call?

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Iraq throws open doors to US firms as army exits

US Commerce Secretary John Bryson
© AFP Jim Watson
Editor's Note: Does this sound like war profiteering?


WASHINGTON (AFP) - Prime Minister Nuri al-Maliki issued an open invitation for US firms to help rebuild Iraq Tuesday, as his oil-rich nation closes the door on a nearly nine-year American military presence.

Hailing a new stage in the country's history, Maliki declared his war-scarred nation was ready to construct a new economy, one that holds "limitless" opportunities for US firms.

"It is not now the generals but the businessmen and the corporations that are at the forefront" of Iraq's future, he told a business gathering just steps from the White House.

"Circumstances have improved because of better security," said Maliki, playing the role of salesman-in-chief for an economy that was ravaged by authoritarian rule and multilateral sanctions even before the war began in 2003.

"We are not satisfied with the number of US corporations in Iraq," he added. "All sectors of the economy are there, open for business for American business."

On the list of sectors open to business, oil will be first among equals.

With massive proven reserves of 115 billion barrels of oil, the fourth largest in the world -- much of it untapped -- foreign oil companies are girding to return to the country.

Output today is around 2.5 million barrels per day, but that rate could be nearly doubled by 2016, according to oil cartel OPEC.
But a political tug-of-war between the semi-autonomous Kurdish north and Baghdad has stalled efforts to create a new law governing the sector for the last three years.

While many companies, including ExxonMobil, have piled into Iraq despite the absence of a clear regulatory framework, there has often been confusion about their legal status.

Last month Exxon signed a deal with the authorities in the north, against the wishes of Maliki's government.

The Kurdistan contract potentially puts another Exxon contract with the Iraqi government in jeopardy.

Crafting a new hydrocarbon law that makes the most of the country's resources, while attracting knowledgeable and deep-pocketed foreign firms, will be essential to putting the country on a sound footing.

Oil exports already account for around two thirds of Iraq gross domestic product, but actual revenues could be increased dramatically if production can be ramped up and if an estimated $100 billion of funds to rebuild the oil sector can be found.

Maliki gave little indication that a deal with the Kurdish north was imminent, but said, "we do need a great package of new laws."

On Monday Maliki held talks with US President Barack Obama in an attempt to create a new paradigm in relations that have frequently been overshadowed by Iraq's descent into civil war and fierce divisions in the United States over the war's prosecution.

The prime minister's delegation included 40 Iraqi businessmen.

US Commerce Secretary John Bryson said that American firms were eager to play a role.
He noted that the Iraqi government had set out $186 billion for around 2,700 projects to meet the country's economic and social needs.

"Meeting those needs can help create jobs here in the United States he said."

© AFP -- Published at Activist Post with license

Ron Paul vs Obama issue by issue

RIP Fed Dollar Swap Intervention: Central Bank Liquidity Injection Half Life Two Weeks

As noted two weeks ago when predicting the efficiency and duration of the latest global coordinated USD liquidity injection, we had a sinking feeling the Fed action would have a very brief time span. Sure enough, judging by the action in two critical FX liquidity indicators - the 3M and 1 Y basis swap indicators, the dollar shortage is baaaaack... only this time, very paradoxically, with implied infinite backstopping from the Fed: if even that factor no longer has an influence on the market's perception of liquidity risk we are in very deep trouble. Which of course is to be expected: the gross synthetic dollar short back in 2007 was $6.5 trillion. Add a few years of ZIRP to this, where the USD is also the funding currency of the world, and one can see why the global USD short position currently is in the double digit trillions. So just how will the Fed backstop $10+ trillion in explicit USD shorts? We can't wait to find out.
3 Month Euro Basis Swap now almost back to pre November 30 global bailout levels:

... but the real action now is in the 1 Year Basis Swap which is back down to December 2008 levels.