You awake at this hour of the night?
You should be.
The Euro is breaking down severely along with big declines in Asia. Why? Lies.
What’s the actual exposure at Unicredit to bad debt? Everything – mortgages, sovereign, Greek, whatever?
Does the market know the truth? No.
Does it know the truth about our banks? No. Bank of America just recently took a charge that was massively in excess of their alleged reserves for the same event. Do you believe its over? Why would you – it hasn’t been thus far.
This campaign of lies is now running out of gas. The market is calling “Bull!” on everything that is being emitted from the so-called “authorities”, including in this case Junker.
There’s no fix for lies other than truth. The problem with the truth is that the banks are insolvent. Yes, ours. Yes, theirs. They did not take down their leverage. They hid it. There, here, everywhere, and it was done with the full complicity and active involvement of governments. Specifically, swaps and derivatives were not forced onto an exchange where chained risk is eliminated and independent nightly margining by a third party who has to make good if they don’t do their job is enforced.
This is why Greece isn’t fixed and why there’s such a tizzy over defaults and “restructuring.” It is why the ECB is so pissed about the possibility of a credit event, because they broke their own rules on collateral quality and are holding a bunch of this trash themselves. Yeah, they’ll probably survive Greece if it blows.
Italy? Not a prayer in Hell and the market is telling you it’s going to happen.
Our government, for its part, faked a “recovery” with more than 10% of GDP in borrowed and blown funds. We spent it on things like giving free illegal guns to Mexican gangs through Gunwalker (yes, that was in the porkulus bill) which unfortunately turned into a subtraction to GDP when the guns were subsequently used to kill people that actually were productive.
Italy “restricted” short sales today. This is yet another desperation move. Were the shorts wrong in 2008? No, they were right. They were trading on knowledge that Lehman was factually bankrupt. They knew this because Lehman tried to repo with them and their collateral was no good – and when challenged on it, they had nothing else to use. Those were not “bets”, they were positions taken with knowledge of the facts.
Facts that our government and Federal Reserve intentionally concealed from the rest of us. That is, they lied.
This evening we’re being treated to the same sort of instability in the futures markets that we saw in 2008, just a few weeks and months before it all blew up. History in the markets rarely repeats, but it often rhymes, and I hear echoes of the crying by CNBS anchors as the DOW fell 700 points.
Folks, I hope you’ve enjoyed the ride upward in the market and the faux “recovery” that produced no jobs and in fact has a lower labor participation rate than it did in 2009. That, of course is otherwise known as the “taxpayer rate”, or those who can pay taxes (it’s hard to pay taxes when you’re unemployed and on the dole.)
Yes, there will be more sticksave attempts. I expect one this coming morning, in fact, as another day like today over in Europe is going to break some key technical levels and might set off a waterfall decline, both in their markets and ours. Then you’ll have to see Obama on the TeeVee once again telling us how exceptional America is.
He’s right – we are exceptional.
We’re exceptional liars, starting with him.
Get some rest folks – it’s going to be in short supply soon.
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