EurAnalysis

Although such an insightfull analysis is really worth of attention, it has nothing in common with Grant Williams.

T

Check page1 brother Tom
Welcome back. It's been a while. Hope all is well

I just lost a close friend to depression and he probably had it since highschool. Funny thing is he would tell his wife that this isnt living life we are in a jail. This is the third friend i lost more or less to depression in my adult life.

Thx man.

Well, bastards kicked me out of job, so suddenly, I am full time trader. Unfortunately still without sufficient equity to survive only from FX cash.

I hope you are all here making pips.

T

down we go, both option is bad for greece and out of fear eur down it goes before the bulls come once again

I have to disagree.
There's relief rally if G-parlament says Yes. If no - down we go.

Later - who knows? We should be very bearish, but markets has gone crazy and normal economic laws do not apply.

Sorry to hear that Tom. Hope all works out.

We might have a buy the rumor and sell the news. This is vey tricky now because of this.


Clashes outside Parliament ahead of loan deal vote




http://sup.kathimerini.gr/kath/engs/...sunday_390.jpg http://wwk.kathimerini.gr/kathnews/images/dot_clear.gif Riot police forces outside Parliament on Sunday.</B> http://wwk.kathimerini.gr/kathnews/images/dot_clear.gif
Greek lawmakers looked set to endorse a new austerity deal on Sunday to secure an EU/IMF bailout and avoid national bankruptcy, defying public rage and protesters who fought pitched battles with riot police outside parliament.
Lawmakers came under immense pressure from both sides, with tens of thousands of demonstrators pouring into Syntagma Square before parliament, while the government warned that rejection would demand «unimaginably harsher» sacrifices by Greeks.
Black-masked protesters threw petrol bombs, creating a wall of fire, and home made bombs made from gas canisters as riot police advanced across the square on the crowds, firing tear gas and stun grenades. Loud booms could be heard inside parliament.

I would watch Price Action into Europe Open.... The night is young...

http://www.ekathimerini.com/4dcgi/_w...02/2012_427358

http://www.ekathimerini.com/4dcgi/_w...02/2012_427383

Snippet:

Within hours, several buildings in Athens were ablaze, including those housing the historic Attiko and Asty cinemas. Branches of big foreign chains and banks were targeted, with a Starbucks coffee shop among those that went up in flames.

Authorities said that more than 40 police officers were injured. More than 50 protesters were taken to the hospital. It was not clear late last night if anyone had been seriously injured. All the parties condemned the violence but also questioned why the police let the situation get out of hand.

Meanwhile, MPs were involved in an intense debate in Parliament. Finance Minister Evangelos Venizelos had a weighty copy of the loan agreement thrown at him by a Communist Party lawmaker as he attempted to argue that it was vital for deputies to approve the new agreement.

“The situation is very clear. Tonight at midnight, before the markets open, the Greek Parliament must send the message that our nation can and will [support the deal],” Venizelos said.

“Today we must understand, and persuade Greek citizens, that when you have to choose between bad and worse, you will choose the bad to avoid the worst,” he added.

The line taken by Venizelos was repeated by PASOK leader George Papandreou and New Democracy chief Antonis Samaras. Both warned that they would expel from their parties any lawmakers who did not vote for the loan agreement. It was expected that about 20 PASOK MPs and fewer than 20 ND deputies would vote against the deal, but with 236 lawmakers the coalition government did not seem to be in danger of losing the vote.

“If we do not dare today, we will live a catastrophe,” Papandreou said.
“What do you want? A country where food will be handed out with food stamps and where we will have no fuel?” Samaras angrily told a dissenting deputy.

Addressing the nation late on Saturday, Prime Minister Lucas Papademos warned that failure to back the bill would mean a disorderly default and “set the country on a disastrous adventure.”

“It would create conditions of uncontrolled economic chaos and social explosion,” he said.

Papademos was expected to repeat this message to MPs . Should the loan agreement be approved, the prime minister is expected to conduct a reshuffle on Monday. Some reports suggested that the cabinet shake-up would be extensive.

Fridays closing buy is still playing out. I'm on the sidelines.

EUR/USD has moved up to high of 1.32486 on news of voting. I will watch Japan reaction after 7:00 PM and watch for Resistance at Round Number 1.3250. Gap from Friday being filled in now.

IFR also suggests Buy The Rumor Sell the Fact...

We will see...

http://www.grammy.com/live

Rest In Peace - Whitney Houston...

Some decent signals will come along at some time.

http://www.telegraph.co.uk/finance/c...ar-attack.html

Snippet:


“The dispute over Iran’s nuclear programme is nothing more than a convenient excuse for the US to use threats to protect the 'reserve currency’ status of the dollar,” the newspaper, which calls itself the voice of the Islamic Revolution, said.


“Recall that Saddam [Hussein] announced Iraq would no longer accept dollars for oil purchases in November 2000 and the US-Anglo invasion occurred in March 2003,” the Times continued. “Similarly, Iran opened its oil bourse in 2008, so it is a credit to Iranian negotiating ability that the 'crisis’ has not come to a head long before now.”


Iran has the third-largest oil reserves in the world and pricing oil in currencies other than dollars is a provocative move aimed at Washington. If Iran switches to the non-dollar terms for its oil payments, there could be a new oil price that would be denominated in euro, yen or even the yuan or rupee.


The worries are already sending ripples of concern around the world.
“While we have been listing the Iranian situation as a source of upside risk for a decade, there are some new factors that can make for a far more dangerous outcome, as the current drift of policy on both sides is creating the risk of a significant escalation,” Sudakshina Unnikrishnan, an analyst at Barclays Capital, said.

“Iran may close the Strait of Hormuz, causing an anticipated 50pc rise in crude oil prices, resulting in widespread economic havoc,” the Tehran Times columnist noted.

So the EU ban could be counter productive, as it keeps the oil price high. However, as long as President Ahmadinejad’s economic war doesn’t escalate into an actual war, we may manage to avoid a crippling oil spike.

http://www.prudentbear.com/index.php...w?art_id=10630

I say game because these matters are caused by policies that are based on hidden agenda. The more you understand the rules of the game the better chance you have to deal with it and get on the short term winning side until the game ends in disaster as it always does when free markets are interferred with.

I will highlight my point or his by attaching some short Snippets:

Snippet:

The Government Bubble

 

1. by Martin Hutchinson
2. February 06, 2012

The causes of the 2007-08 downturn are now etched indelibly into popular memory: it all came about because of an infamous housing bubble, which policymakers inexplicably failed to spot. Readers of this column will know that I regard this explanation as simplistic, although housing was certainly an intermediate cause of the problem. However spotting the housing bubble at the time was difficult (though not impossible – this column did it a couple of times) which is why it is unsurprising that commentators have failed to identify that repetition in greater magnitude of the same policy mistake – excessively cheap money – has now produced another bubble. Not in gold and commodities, whose price rises are an entirely rational response to monetary conditions. Today the true and hugely damaging bubble is in government.

Political philosophies have underpinned both bubbles. In the housing case, there was a belief, fed by the absurd U.S. home mortgage guarantee system, that home ownership was in some sense a right, even for those who could not properly afford the mortgage payments. In the government case, the belief was the age-old Keynesian Bureaucrat Fallacy of government infallibility, that problems could best be solved by government intervention, and recessions cured by injections of government money.

As well as metrics being abandoned, traditional lending standards and budget constraints were trashed. However much Republicans may wish to blame President Obama for this, the reality is that subprime budget policies were adopted in 2008, nearly a year before Obama took office.

The first trillion dollar deficit occurred in the year to September 2009, for which Obama had de facto responsibility for only the last 3-4 months. The equivalent of “liar loans” in which the borrower did not have to prove his income or ability to repay the mortgage was the 2009 “stimulus” in which government spending did not have to be shown to have any value.

Many have written of the bubble in U.S. Treasury bond markets, with the 10-year yield below 2% while inflation is at above 3%, and the Fed owning close to $3 trillion of government guaranteed paper, mostly of long duration, but this is a symptom of the bubble, not the bubble itself. The collateralized debt obligation market was an efficient if flawed mechanism to distribute securitized home mortgages, but it was housing and the mortgages themselves, not the securitized market, that formed the bubble. If home mortgages had remained sound, mortgage bonds would equally have been sound. Similarly, it is government spending and borrowing that forms the current unsustainable bubble; the Treasury bond market is merely a financing mechanism.

In the government case, most of the blame should fall on bank regulators, who are even more culpable than the rating agencies of 2005-08. They have allowed banks to invest in government bonds without assigning capital to their holdings, thereby effectively permitting infinite leverage. In addition, blame should fall on the designers of current monetary policies, which have encouraged banks to buy huge stocks of government bonds and finance them through short term borrowing and repurchase agreements, making an unlimited profit through unlimited leverage of the yield curve.

Making this silly game more profitable than small business lending is a principal source of the economic sluggishness in the United States, and even more so in southern Europe.

The Enron example showed that jail sentences are felt to be appropriate after financial crashes. In this case they should fall on regulators, monetary policy designers and budget committee chairmen rather than on the relatively blameless bankers, who were simply responding to the misguided incentives they were given. Of course, in both the housing and government examples, some operators were worse than others.

Countrywide’s mortgage lending practices appear to have been significantly more feckless than most of their competitors’ while among governments Greece, Italy, Illinois and California were notably less prudent than their brethren.

In the government bubble, central banks have played the exacerbating role that Fannie Mae and Freddie Mac played in the mortgage bubble. The Bernanke Fed’s repeated purchases of government bonds, a practice believed devoutly to be thoroughly unsound before 2008, mirrors Fannie and Freddie’s massive portfolio of mortgage bonds and their determination not to be left behind in market share however “subprime” the mortgage market became. Similarly the European Central Bank’s $600 billion 3-year 1% bank funding in December 2011, and its promise to repeat the operation in February, have provided a massive subsidy to the government bubble in the same way as Fannie and Freddie’s recklessly awarded guarantees, their dumbing down of approval criteria and their bloating of maximum mortgage limits subsidized the subprime mortgage bubble.

Both housing and government bubbles thus involve massive amounts of “malinvestment” in the Austrian economic sense – money flowing into assets and activities that are superfluous to the economy’s requirements. The solution in both cases is a recession that writes down the malinvestment and begins the redeployment of resources to more economically viable areas. In the case of housing, that process is nearly finished – there are strong signs that house prices are nearing a bottom, having returned in most areas to below-average multiples of incomes. The next few years will see two further downdrafts, however, one caused by the inevitable (if artificially delayed) foreclosures and the other caused by a rise in real interest rates to historically appropriate levels. It may thus be 2018-2020 before the housing market is truly restored to health, in terms of new home building, etc.

In the government case, the first solution attempted will inevitably be a burst of inflation, with interest rates being kept artificially below the inflation rate, inflation statistics being falsified, and the Fed attempting to depress the real value of the government’s obligations. This will not work, but the temptations to the Fed and the authorities are likely to be such that no Paul Volcker will appear as in 1979 while inflation is at the relatively benign 10-12% level. Instead, sloppy money will be perpetuated until hyperinflation of 100% per year or more has entered the American experience for the first time.

Kno's Comments:

Conclusion and what a shame people can destroy lives while seeming to be in control with intellegent policies and the sheep get lead to slaughter.

The Inevitable End To It !!!

At that point, the international money and capital markets will refuse to accept the now worthless dollars (and, equivalently, euros) and will increasingly move to gold, with governments in the U.S. and elsewhere being powerless to prevent this development. Eventually the combination of a Gold Standard, a balanced budget amendment to the Constitution and a massive write-down of remaining U.S. and European obligations will restore order. Needless to say, a political crisis of some magnitude will accompany these developments, since current politicians are quite incapable of dealing with the rigors of Gold Standard government finance.

This column said as early as 2005 that the housing bubble would inevitably burst, and that it would cause a major economic disruption. The same is now equally obvious for the bubble, not merely in government bonds, but in government itself.

Just had the 2nd anniversary of a similar thing, she left a loving husband and 2 wonderful children, if only the rest of us could have helped somehow.

http://www.ekathimerini.com/4dcgi/_w...02/2012_427391

Snippet:


Greece to get 35 bln euros from EFSF?




http://sup.kathimerini.gr/kath/engs/...390_220112.jpg http://wwk.kathimerini.gr/kathnews/images/dot_clear.gif
Europe’s rescue fund may provide 35 billion euros ($46 billion) to help Greece buy back bonds held by euro-area central banks as collateral, draft legislation published by the Greek government shows.
The European Financial Stability Facility would lend Greece that amount to buy back sovereign bonds held by central banks as collateral in refinancing operations, according to documents posted on the Hellenic parliament’s website. The European Central Bank would facilitate the purchases.

In July last year, then-ECB President Jean-Claude Trichet said that euro-area governments had agreed to guarantee as much as 35 billion euros of Greek debt for the purposes of ECB refinancing operations. That would be necessary if Greece is deemed to be in selective default after a bond swap with private-sector investors, because the ECB cannot accept bonds with a default rating.

The documents show the EFSF would also provide 30 billion euros “in order to permit Greece to finance, in part, the Voluntary Liability Management Transaction,” or private-sector bond swap. A further 5.7 billion euros would help cover interest payments on the bonds.

The EFSF could lend Greece an additional 23 billion euros “in order to finance the recapitalization of certain financial institutions,” according to one document.
[Bloomberg]

And Now Back To The Politicians ...

More than 40 MPs ousted as Greece approves EU-IMF deal



http://sup.kathimerini.gr/kath/engs/...t_390_0212.jpg http://wwk.kathimerini.gr/kathnews/images/dot_clear.gif Greece’s Parliament approved in the early hours of Monday the country’s new loan agreement with the European Union and the International Monetary Fund despite more than 40 PASOK and New Democracy MPs voting against the terms of the deal.
Out of 300 lawmakers, 278 cast their ballot following several hours of intense debate. Of those, 199 voted ‘yes’ in principle, while 74 voted ‘no’ and five voted ‘present’. The rest did not vote.

Twenty two PASOK MPs and 21 New Democracy deputies voted against the bill. In both cases, thoe lawmakers were expelled from their parties.

Former Transport Minister Makis Voridis and Deputy Mercant Marine Minister Adonis Georgiadis went against the line of their party, Popular Orthodox Rally (LAOS), by voting for the bill. Both were expelled.

It was the first time in Greek parliamentary history that so many lawmakers were ousted from their parties on the same night.

The vote followed a tense debate in Parliament about the terms of the agreement, which include unpopular measures such as a 22 percent cut to the minimum wage and further reductions in pensions.

Prime Minister Lucas Papademos repeated his warning that if Greece did not take up the new loan agreement, it would face a «catastrophic» disorderly default.

The debate was overshadowed by an outbreak of rioting in central Athens that led to several buildings being set on fire and a number of shops being looted.

"Vandalism and destruction have no place in a democracy and will not be tolerated,» Papademos told Parliament.
"I call on the public to show calm. At these crucial times, we do not have the luxury of this type of protest. I think everyone is aware of how serious the situation is."
More than 50 protesters and some 40 policemen were injured in the clashes, which disrupted a peaceful protest attended by tens of thousands of people.
ekathimerini.com , Monday February 13, 2012 (01:21)

yea same here, def a helpless feeling. Had no idea... depression is one of those things that we don't fully understand, but then again how much of the brain do we really know? Maybe the same as the % we actually use at our peaks lol 15%?

http://www.321gold.com/editorials/pe...nto021212.html

We are starting to understand US Bonds here so now on we go...

Snippet:

Bell Rings for Bond Bubble


Michael Pento
Pento Portfolio Strategies
Posted Feb 12, 2012

They always tell you no one rings a bell when a market top or bottom is reached. But a bell is now ringing for the end of the thirty-year bull market in U.S. debt. And ironically, the bell ringer is our very own U.S. Treasury!
The U.S. Treasury Borrowing Advisory Committee, which brings together dealers and Treasury officials, met last week in a closed meeting at the Hays Adams Hotel. The committee members unanimously agreed that the Treasury should start permitting negative interest rate bids for T-bills. In other words, newly issued T-bills from the Treasury would offer investors a guaranteed negative return if held to maturity. The mania behind the U.S. debt market has reached such incredible proportions that investors are now willing to lend money to the government at a loss; right from the start of their investment. This is a clear signal that the bond market can’t get any more overcrowded and can’t get any more overpriced.

Kno's Comments: Only In America. The Theatre Of The Absurd.

Of course, many in the MSM contend there is justification for today’s ridiculously low bond yields and that a bubble in U.S. debt is impossible. But those are some of the same individuals who claimed back in 2006 that home prices could never decline on a national level and any talk of a bubble in real estate was nonsense. These are also the same people who assured investors in the year 2000 that prices of internet stocks were fairly priced because they should be valued based upon the number of eyeballs that viewed a webpage.

Kno's Comments: Maybe this time they will be right. Bubble Still On ? Not much longer.

But we can easily see the future of U.S. Treasuries from viewing what is occurring in Portugal and Greece today. Portugal and Greece were able to borrow tremendous amounts of money because they converted their domestic currencies to the Euro and therefore, had the German balance sheet behind them. If these two countries had to borrow in Escudo’s and Drachma’s instead, yields would have increased much earlier, forcing a reconciliation of the debt years before a major crisis occurred. Therefore, their current debt to GDP ratios would be much more manageable. But now their bond bubbles have burst.


Kno's Comments: We have a preview of the Future right in front of our eyes.

The yield on the Portuguese 10 year was 5% a year and a half ago; today it is 15%. Greek 10 year bonds yielded 5% two and a half years ago; today they are 34%! The bottom line is that these counties were able to borrow more money than their economy was able to sustain because their interest rates were kept artificially low.

Likewise, the U.S. was and still is able to borrow a tremendous amount of money - far more than can be sustained by its income and revenue - because interest rates have been artificially low for far too long. Not only has the Fed pegged interest rates at zero percent since December 2008, but the U.S. dollar has been the world’s reserve currency for decades.

These two factors combined have deceived the U.S. into believing it can add about 8% of GDP to its debt each year. And since the end of 2007, the amount of publicly traded debt has increased by nearly $6 trillion; that’s over 100 percent!

Kno's Comments: Just Think About What You Have Read. Not many out there understand what the heck is going on. Many as in Billions VS Millions.


New Treasury issuance will be inexorably north of $1 trillion for at least the next decade to come. Along with that increasing debt supply, there is tremendous inflationary pressure coming from the expansion of the Fed’s balance sheet and a Fed Funds rate that will end up being at zero percent for at least six years in total. Those two factors alone paint a very ugly picture for the direction of bond prices.

Manias can last a very long time and become more extended than reason should allow. But wise investors should prepare now for the upcoming interest rate shock and continue to accumulate anti-dollar investments.

Once the bond bubble explodes here as it did in Southern Europe it will destroy the dollar along with it. That’s because the sellers of U.S. debt will be forced to abandon dollar based holdings completely. That will mark the end of the U.S. dollar as the world’s reserve currency and the restoration of gold as the global store of wealth.
###

Knowledge Is Power. You have the Knowledge in part and be prepared to use it.

EUR/USD hanging around 1.3213

The Low is 1.3200 and the High on the brief Short Covering POP is 1.32627

I am not so sure I agree with all this doomsaying. The banking and government debt fiascos are all part and parcel of a new and more aggressive capital. I don't think any power on earth would be willing to fetter that lack of constraint as to do so would place a ceiling on infinite growth.

Whether capital uses the dollar, euro or yen is irrelevant as well, although at this juncture, the US is the most able of global states to protect passive wealth and be seen to be able to do it. It's level of debt is not as significant an issue, I also believe. Much of that shortfall is in fact covered from dividend and profit remittances out of China where the value disparity between accumulation and labour is still as vast as inter-stellar space. And of course, much of this is transacted under command control which is the perfect mechanism for extracting said surplus.

Just my thoughts as I am less concerned with the current impasse..it will pass.