Financial topics

[Reality Check]

http://www.youtube.com/watch?v=J8CqaHTygSc&feature=endscreen&NR=1

That link is well worth watching. Thanks for sharing.

[Reality Check]

Clearly, he lost 100% of the funds he put toward CDS exposure in 2005 and the first part of 2006, which was unnecessary. Those are quarterly payments, though the contract periods can be longer. Not to say I didn't make the same timing mistake, as I also thought the bubble would top in 2005 and sold out early, losing a lot of potential profits. Point being, in 2005 I would have also thought he was doing the right thing, but the fact is he pissed away a lot of money on quarterly CDS payments when he didn't need to. But based on reading this account and one other one, it would have been necessary to take at least some losses, as the big banks were not willing to sell CDS when it became clear the unravelling was close at hand. When the latest time was to buy CDS I don't know, probably mid 2006 as home prices were turning down then. The fact that he warned investors about the potential time frame was good, but it doesn't seem like he understood the psychology of losing trades because he'd never really had any before this one. Lucky for him that a few more investors didn't withdraw or he'd have hit the wall and we never would have heard of him. But I'd say to figure out as much as he did at his age and with his limited real estate background was a big accomplishment. Let's see if he gets his gold and farmland bets right eventually.

I will just have to take your word for the specific contracts he was investing in. I did not see that level of detail in the quote you posted and I did not dig any deeper. My comments were simply based on the information you posted in your quote.

[Reality Check]

When you are discussing flight to safety there is another type of precious metal that United States has a substantial portion of the worlds supply of.

That is the value added, highly enriched Uranium and Plutonium that is stored on U.S. SSBNs at sea and in underground ICBMs in Wyoming.

Safety is not only measured in terms of Gold stockpiles and the risk of paper currency devaluation.

[John]

I think I've figured out how this new, wonderful European compromise
works.

Angela Merkel promised last week that Germany would never agree to
eurobonds, as long as she lived. But the new compromise effectively
does the same thing.

* The new rules will allow the ECB to bail out the banks, without
putting the new debt on the balance sheet of the country, and thus
avoiding those painful austerity demands.

* The banks can use the money to buy the country's bonds, thus pushing
down bond yields (interest rates). Spain's 10-year bond yields have
recently been above 7%, and Italy's above 6%.

* With interest rates lower, the countries will be able to sell more
bonds, and issue more debt.

* Thus, the same behavior will continue as before.

Today's euphoric market reaction is based on the fact that all this
new liquidity will enter the marketplace, and, as usual, it will enter
the American stock and bond market, pushing stock prices up and bond
yields down.

This is being called a "growth pact," but it will not create one iota
of growth. It will simply permit profligate behavior to continue.

The can has been kicked down the road for a few extra weeks.

As I understand it, this "growth pact" has to be approved by the
Bundestag (German parliament), and perhaps even Verfassungsgericht
(Federal Constitutional Court). It's future is not entirely certain
in either place.

[John]

Correction: The bailout of the banks will be from the EFSF,
which is largely funded by Germany. So Germany is bailing
out other countries' bonds.

[aedens]

http://www.ted.com/talks/donald_sadoway ... nergy.html

[aedens]

Correction: The bailout of the banks will be from the EFSF,
which is largely funded by Germany. So Germany is bailing
out other countries' bonds.

Extremely diluted asset value in limited cap ex spending but some upticks are ongoing so not the end of the world for a few. Expect a crushing landing to recessionary to outright depression. No sane market participant is that insane to invest in the Bund now. They do not even pretend to care or ever did since the Euro was not a project but a design as we already have known. More of the same. viewtopic.php?f=14&t=2&p=10800&hilit=keynes#p10800
Fabian intent of a debt Union and its consequences IMO.
http://www.youtube.com/watch?feature=pl ... NgDReKg2Ss @3:18
On the reality side of the world it has no engine of growth with most of the G20 growth countries approaching stall speed at the same time.
I see some movement and we never stopped going forward our segments. China will shift to renewable quickly and we have a limited window also.
Review the Ted link above. Government is in the way and this time its going to be fatal to the economy. We do need to post charts and continue
with stating the obvious dire issue as over 49 million on assistance and when I press the local overtly liberal they are not providing or towing the usual
party line about they will do this or that. They are alone now since the cheerfull idiots are separating themselves from the usefull idiots. I see it locally
and they are scared.
http://video.google.com/videoplay?docid ... 629231653# review primer

[Reality Check]

Correction: The bailout of the banks will be from the EFSF,
which is largely funded by Germany. So Germany is bailing
out other countries' bonds.

The various EU bailout shell corporations are very interesting creatures ( or persons ) created by the EU elites.

It is an interesting exercise to assume that you are thinking like some one who uses fraud and lies to achieve your objectives and you had control of these funds.

2010 - European Financial Stabilisation Mechanism (EFSM) ( Nominal 60 Billion Euro Fund raised issuing bonds - EU Commission Budget serves as collateral )
http://en.wikipedia.org/wiki/European_F ... _Mechanism

2010 - European Financial Stability Facility (EFSF) ( Maximum 780 Billion - Facility goes out and borrows money - against limited guarantees by 27 EU countries )
http://en.wikipedia.org/wiki/European_Financial_Stability_Facility

2012 - European Stability Mechanism (ESM) ( Maximum 700 Billion Euro Fund - to be funded slowly over 5 years - 500 Billion as guarantees - not cash )
http://en.wikipedia.org/wiki/European_Stability_Mechanism

Please note - funds from the first two above bailout corporations have already been expended, in full, or in part, to partially bail out Ireland, Greece and Portugal.

Please note that the primary funding mechanism for all these quasi-governmental corporations is to sell bonds on the private bond market with implicit, or explicit, guarantees from various governments that some limited amount of monies borrowed would be paid back. None of these funds have a "full faith and credit" guarantee from any government backing them up.

Since these funds normally distribute bailouts by loaning money, rather than giving money, funds would hold an asset on their books, in the form of a promise to pay from the country ( or bank ) being bailed out. The risk would be transferred to the 27 EU countries but not shown on their books until a default on those promises to repay the bailout was recognized. Similar guarantees provided in the United States are not counted as part of the U.S. governments public Debt of 16 Trillion dollars. Germany and other EU countries may not include these loan guarantees in their government debt figures either.

Again, It is an interesting exercise to assume that you are thinking like some one who uses fraud and lies to achieve your objectives and you had control of these funds. Here is one Billionaire's creative solution to this exercise: http://www.cnbc.com/id/47942781

[Reality Check]

By year end 2012 - Spanish Bank supervision - and Bank Risk - to be transferred to EU central authorities - from Spain.

http://www.telegraph.co.uk/finance/financialcrisis/9363900/Debt-crisis-Germany-caves-in-over-bond-buying-bank-aid-after-Italy-and-Spain-threaten-to-block-everything.html

[aedens]

The Hegelian dialectic is the framework for guiding our thoughts and actions into conflicts that lead us to a predetermined solution. If we do not understand how the Hegelian dialectic shapes our perceptions of the world, then we do not know how we are helping to implement the vision. When we remain locked into dialectical thinking, we cannot see out of the box. Hegel's dialectic is the tool which manipulates us into a frenzied circular pattern of thought and action. Every time we fight for or defend against an ideology we are playing a necessary role in Marx and Engels' grand design to advance humanity into a dictatorship. If you properly discern Sismondi’s Nouveaux principes d’ economie politique you will see influence by both Smith and Rousseau and Marx who included it into his work and the Political reality the Eurocrats wished to be. It will fail since darkness can never exist in the light.
http://www.dcwg.org/detect/checking-win ... nfections/