Friday the 13th- semi scary & semi-funny

So much to write about this Friday the 13th, but since I am a little bit under the weather, we'll stick to highlights and summaries- enough information to keep my readers well-informed without ruining their weekends...

~  File this under "Too Funny.." -- we mentioned earlier in the weekend that Fitch's credit rating agency promised France it would not lower its undeserved AAA pristine credit rating until at least 2013.  And markets rejoiced, and the snotty, snooty French became more smug...

Well it turns out there isn't just one credit rating agency that determines how nations are to be rated, but three-  Fitch, Moody's and S&P which today announced they will cut the credit ratings of France along with Austria and two notches cut for Italy, Spain and Portugal.   S&P would spare Germany, the Netherlands, Finland and Luxembourg the axe this go-round.

The official announcement will come at around 4:30 pm ET, after the US stock market has closed, (though the roaches who profit on Wall St. aren't taking it well so far) so there's always a chance things can be altered, but if sources are correct...

 Hawww Hawww Hawww~

~  Next topic: Greece...  Here's the quickest, most concise summary I can give as to where things are at moment:  Greece is virtually bankrupt. It needs another 130bill Euro to survive. Its running out of bare necessities like aspirin.  Parents literally putting children on streets with notes saying they can't take care of them anymore....

Germany says "Greece, you must negotiate with bondholders and banks to come to an agreement First.  Bondholders and banks say: Fuck you & your problems Greece- we're not taking any more cuts--give us our money!  So Stalemate for now.  IMF- US owned & run finance arm doesn't want to keep helping Greece; looks horrible for Obama in election year.  No one wants to prop Greece anymore but everyone scared of consequences if they don't...

Will more billions upon billions be poured into Greece's caverns?  And what about Ireland, Hungary, Portugal, etc...  Stay tuned folks and keep a clean pair of panties or undies nearby.

~ The NY Times wrote a good article today entitled, Inside the Fed in 2006: A Coming Crisis, and Banter.  Its a long article which you can read in its entirety by clicking the link below via Yahoo! Finance:

http://finance.yahoo.com/news/inside-fed-2006-coming-crisis-124207691.html

Here are a couple of my favorite nuggets:

"“We think the fundamentals of the expansion going forward still look good,” Timothy F. Geithner, then president of the Federal Reserve Bank of New York, told his colleagues when they gathered in Washington in December 2006.  Some officials, including Susan Bies, a Fed governor, suggested that a housing downturn actually could bolster the economy by redirecting money to other kinds of investments."

"And there was general acclaim for Alan Greenspan, who stepped down as chairman at the beginning of the year, for presiding over one of the longest economic expansions in the nation’s history. Mr. Geithner suggested that Mr. Greenspan’s greatness still was not fully appreciated...  "I’d like the record to show that I think you’re pretty terrific, too,” Mr. Geithner said in adding his voice to the chorus of tributes at that final meeting (of Greenspan's- Jan '06). “And thinking in terms of probabilities, I think the risk that we decide in the future that you’re even better than we think is higher than the alternative.”

 And lastly.. "“It’s fitting for Chairman Greenspan to leave office with the economy in such solid shape. The situation you’re handing off to your successor is a lot like a tennis racquet with a gigantic sweet spot.”" -- Janet Yellen, then president of the Federal Reserve Bank of San Francisco

Is it any wonder this nation, and the entire global economy is in such dire straits with such soulless incompetents like Greenspan running things then, and in the case of Golden Boy Timmy Geithner, running things still today?

Time Magazine - Feb 15, 1999; Cover Text: "The inside story of how the Three Marketeers (Robert Rubin, Alan Greenspan & Larry Summers) have prevented a global economic meltdown-- so far"

Quotes Albert Edwards, Bill Buckler, Alan Greenspan,William Buiter, Mr Mantega ( Brazil’s Finance Minister ), Ben Davies & Ambrose Evans-Pritchard

Cannot believe that i´m quoting Greenspan without making the usual jokes about his "wisdom"......... ;-)

Fast unheimlich das man mal ohne Häme Greenspan zitieren kann...... ;-)

Albert Edwards via ZH

Central bankers, by pursuing policies that allowed the middle classes to borrow against rising asset prices, kept them consuming despite the stagnation of their incomes and hence disguised the effect of government policies that allowed the rich to acquire virtually all of the gains in GDP growth.

And in the process of “robbing” the middle classes and now still attempting to keep asset prices artificially high, they are also robbing our children of the ability to buy a house at an affordable price. Yet central bankers still see QE as key to maintaining the illusion of prosperity and stoking consumer spending

Bill Buckler via ZH

"Ninety-seven percent of all existing Treasury debt has been created since August 15, 1971! Ninety-three percent of it has been created since Mr Volcker “saved” the paper Dollar in late 1979! Please note that the gain in Treasuries and the loss in the US Dollar almost exactly cancel out.

Please note also that even the biggest gain in these paper markets fades into insignificance against Gold’s rise."And here is the answer all the "gold bugs" have been waiting for: "The paper money “price” of Gold will last as long as the attempt to make paper money “work” lasts. In the end, Gold will no longer have a “price” because it has reverted to its role as MONEY. Whenever and wherever that happens, that nation can return to the production of wealth - rather than “money”."

Alan Greenspan via The Reformed Broker

Mr. Greenspan replied that he’d thought a lot about gold prices over the years and decided the supply and demand explanations treating gold like other commodities “simply don’t pan out,” as Mr. Malpass characterized Mr. Greenspan. “He’d concluded that gold is simply different,” Mr. Malpass wrote. At one point Mr. Greenspan spoke of how, during World War II, the Allies going into North Africa found gold was insisted on in the payment of bribes. Said the former Fed chairman: “If all currencies are moving up or down together, the question is: relative to what? Gold is the canary in the coal mine. It signals problems with respect to currency markets. Central banks should pay attention to it.”

William Buiter via FT Alphaville

…even the fiscally best-positioned G7 countries, Germany and Canada, face major fiscal challenges. Germany would not be able to join the Euro Area today if it were not a member already, because it fails to meet the deficit criterion (no more than 3% of GDP) and the debt criterion (no more than 60% of GDP) – in the case of the public debt to GDP ratio, by a significant and growing margin. Indeed, the aggregate Euro Area fails both criteria by wide margins, and of the 16 individual member states, only Luxembourg and Finland qualify on both criteria…

With QE 2.0 now finally on the table & spreading "competitive devaluations" ( timing wasn´t bad... see Update)around the globe i think you should give the Ludwig von Mises reference via John Hussman a second look....

Da ja nun auch endlich offiziell QE 2.0 angekündigt worden ist und weltweit ein finaler Abwertungswettlauf ( Timing hätte schlechter sein können...siehe Update )in Sachen Währungen um sich greift ( und dabei rasant an Fahrt gewinnt ) kann es nicht schaden noch einmal einen Blick auf das Ludwig von Mises Zitat via John Hussman zu werfen....

UPDATE:

Ambrose Evans-Pritchard Telegraph

States accounting for two-thirds of the global economy are either holding down their exchange rates by direct intervention or steering currencies lower in an attempt to shift problems on to somebody else, each with their own plausible justification. Nothing like this has been seen since the 1930s.

Brazil’s finance minister Mr Mantega via FT Alphaville

Mr Mantega, Brazil’s finance minister, declared earlier this month that the Brazilian real was caught up in ‘a silent war’ in currency markets, as nations compete to speed up their economic recoveries by putting their exporters at an advantage…

Ben Davies Ft Alphaville

Within a single week 25 nations have deliberately slashed the values of their currencies. Nothing quite comparable with this has ever happened before in the history of the world. This world monetary earthquake will carry many lessons.

Got GOLD ? ;-)

Bernanke vs Greenspan

Amazing that everybody wants to believe that Ben "Core" Bernanke has become an inflation hawk over night..... The only reason this guy is talking tough is that the $ is crashing further and the ECB is forcing him to act. But so far the Fed din´t act and i refuse to believe it until i see it confirmed from at least three sources.... :-) Especially in the face of the ongoing recession....... Disclosure : I´m with Mish´s definition on Inflation ( see Inflation: What the heck is it? ) . It seems i´m not the only one who is sceptical... Make sure you read the rant from Tim / The Mess That Greenspan Made Fisher: Silly interest rate talk

Überraschend das irgendeiner zumindest auf dieser Welt die Aussagen von Ben "Core" Bernanke in Sachen Inflationsbekämpfung für bare Münze nimmt..... Der einzige Grund warum praktisch über Nacht der Falke in Ihm erwacht zu sein scheint ist wohl der EZB zu verdanken die die Fed zum Handeln zwingen wird um einen totalen Kollaps des $ zu verhindern. Ich glaube aus Erfahrung keinerlei Rethorik die aus den Mündern von US Notenbänkern kommt und bin gespannt ob den hohlen Phrasen ausnahmsweise auch mal Taten folgen werden. Glaube das erst wenn ich das von mindestens drei unabhängigen Quellen bestätigt bekomme..... :-) Besonders dann nicht wenn die Erhöhungen im Angesicht einer üblen Rezession erfolgen. Hinweis : Bekanntermaßen sehe ich die Definition von Inflation wie Mish ( siehe Inflation: What the heck is it? ) . Sieht ganz so aus als wenn nicht nur ich der einzige ist der eine gewisse Skepsis an den Tag legt..... Empfehle hier den Rundumschlag von Tim / The Mess That Greenspan Made Fisher: Silly interest rate talk

via Calculated Risk Tim Duy: Fed Between a Rock and ...

Bottom Line: The Fed has no one to blame for their predicament but themselves. Bernanke & Co. cut rates too deeply, fighting a battle against deflation that never was. Now they are backed into a corner; either raise rates and risk upsetting a very fragile economy, or stay the path and risk the inflationary consequences.

AMEN!

Alan Bernanke.......

It took the Fed only one quarter to reverse almost 50 percent of the past 2 years of rate increases. But this is what happens when all your models are so out of touch with reality & you are ignoring your duty for oversight. I think if there will be any rate increases in the distant future they will start with well telegraphed measured 0,125 % steps...... I assume that it is more likely that Elvis is still alive than that the Fed will ever orchestrate an emergency rate hike..... Unfortunately i havn´t found a broker that is willing to accept that bet :-) The next question will be if the Greenbag is on its way to become the new currency for the next wave of carry trades.....

Die Fed hat binnen eines Quartals bis Ende Januar vermutlich die Hälfte ihrer Zinserhöhungen zurückgenommen für die sie in ihrem mühseligen Normalisierungsprozess ( 0,25% Schritte ) zwei Jahre gebraucht hat. Eine echt reife Leistung. Das ist aber wohl der Preis dafür das man vollkommen an der Realität vorbeilebt und sich nach Modellen richtet die aus der Steinzeit stammen. Zudem hätte ein Großteil des Wahnsinns vermieden werden können wenn die Fed Ihrer Aufsichtspflicht nachgekommen wäre und die meisten der durchgeknallten Darlehensfinanzierungen nicht durchgewunken hätte. Ich befürchte schon jetzt das sich die Fed im nächsten Zinserhöhungszyklus (irgendwann in 10 Jahren) zu gewaltigen Zinsschritten von 0,125% entschließen wird.... Zudem ist wohl wahrscheinlicher das Elvis lebt als das die Fed jemals eine ausserplanmäige Zinserhöhung initiieren wird.. Leider haben ich noch kein Wettbüro gefunden das diese Wette entgegennimmt..... :-) Die nächste Etappe wird wohl sein das der Greenback die neue Carry Trade Währung werden könnte....

From panic to penicillin - Bernanke, blogged Ft Alphaville

Less Than Respectful Commentary on the Fed Put and Fiscal Rescue Efforts Naked Capitalism

Five Things You Need to Know: Emergency Rate Cut, What It Means and What to Do Minyanville

Greenspan Put Is Dead. Long Live Greenspan Put: Caroline Baum Bloomberg

The Fed Blinked: Now, What? Herb Greenberg

Bernanke Blinks Mish

Desperate measures Economist

Es riecht nach Verzweiflung FT Deutschland

Time to remember this great chart from Minyanville showing how stupid the case "Don´t fight the Fed" is...

Höchste Zeit sich den wunderbaren Chart von Minyanville anzusehen der einmal mehr eine angebliche Börsenweisheit "Don´t fight the Fed" entzaubert.....

Lots of the mess can be blamed on Greenspan but as shown in this excellent piece The Education of Ben Bernanke from the NYT ( Hat tip to Hellasious from Sudden Debt ) i doubt that Bernanke would have done much differently.... Especially after the latest actions......

Sicher kann ein Großteil des aktuellen Unheils Greenspan angelastet werden aber dieser großartige Bericht The Education of Ben Bernanke der NYT ( Dank an Hellasious von Sudden Debt zeigt eindeutig das Bernanke wohl ganz ähnlich gehandelt hätte ( siehe Aktion gestern ) .......

Bernanke is also firmly opposed to the notion that central banks should raise rates to prick bubbles in the stock market or elsewhere. In a paper written at the height of the dot-com mania, in late 1999, Bernanke and his friend Gertler argued that it is virtually impossible to identify a bubble before it pops.....

Bernanke made a small contribution to a problem that would blossom in a big way on his watch. In the aftermath of the 2001 recession, inflation was at its lowest level in decades. Though consumer prices were rising, Bernanke feared a possible bout of deflation — the potentially devastating phenomenon in which prices drop, leading to lessened business activity and then still lower prices and so forth. This occurred during the Depression and also in Japan in the 1990s. Bernanke’s argument provided a major element of support to Greenspan for keeping interest rates low

But as a goldbug/bull you gotta love these guys......

Aber als Goldbulle muß man solche Typen einfach lieben.....

More Greenspan Bashing

Compare this with the exclusive view from Greenspan Alan Greenspan explains the roots of the mortgage crisis If you can stand more from Greenspan click here or watch the following video

Vergleicht das mit den doch bedenklichen Aussagen von Greenspan......Alan Greenspan explains the roots of the mortgage crisis Wenn Ihr noch mehr von Greenspan vertragen könnt klickt bitte hier oder seht einfach das folgende Video



Fed Shrugged as Subprime Crisis Spread NYT

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