Definitely not sticking my head in the sand yet! Just watching, saving, working (thankfully) and hoping things will perk up for real soon. I'm no expert on this, at all, but with all the craaaazy government (and personal) debt going on, and with the banks just RAKING in the money on top of their bale-out money, just something's gotta give.

Hmm.... "bale"?

Your probably right their, Hawk, about the whole bale thing...

;)

Mrs watanabee is getting out of australian dollar.





http://www.nakedcapitalism.com/2010/05/this-is-what-a-carry-trade-unwind-looks-like.html

Ouch.

size-full wp-image-10019" title="sg2010052055641" alt="sg2010052055641" src="http://www.nakedcapitalism.com/wp-content/uploads/2010/05/sg2010052055641.gif" />

The media has been fixated with the euro versus the dollar, and has paid less attention to some of the dramatic action on other fronts. Mrs. Wantanabe seems to be shedding risk, big time.

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Something nasty about to happen in gold market. really nasty, worst than all those CDS/real estate.



http://gordongekkosblog.blogspot.com/2010/03/its-going-to-implode-buy-physical-gold.html

Fast approaching is the event of GAME OVER for London, a condition that has already reached critical level, according to a key reliable source of information with London connections and direct experience with its market events. How long can a major metals exchange sell contracts but have miniscule supply of gold in their vaulted possession? The paper gold market and the physical gold bullion market have finally separated in a practical manner, meaning actual gold has almost no role anymore in London paper contract settlement. The absence of gold in London requires extraordinary tactics to settle contracts and to obtain gold bullion. Red tape procedures delay delivery for individuals, and bribes accompany gold delivery demands as standard practice. The London Bullion Market Assn has almost zero gold, its supply having been drained in high volumes since early December, a process currently in acceleration. The opportunity to convert fiat money into precious metal at prices considered reasonable is also vanishing. The London gold banker said,





"There is going on a lot more than meets the eye. The physical system is actually consolidating bigtime and is organizing itself with lightning speed, totally hidden from pretty much anyone, even the so-called insiders. The paper precious metal market and the physical precious metal market have defacto disconnected. The paper and physical gold markets currently operate in parallel universes. The outflow of physical metal from bank vaults is happening at a mind bending pace."

Wall Street and the US Dollar are being increasingly marginalized at the global level with China having instructed its companies to renege on Wall Street’s derivative contracts last year; Russia, Middle-East and China setting up their regional currency blocs; Germany calling for an end to the CDS casino and the recent exclusion of Wall Street banks from European Government bond market. For obvious reasons, none of this is getting much play in the lapdog US media.

Well that one is a bit dated. so I'll use this thread to watch UK, EU and US economy. (Tory will actually play huge role, including US economy. So cross your finger.)



-----------

Finance ministers from the world’s leading economies ripped up their support for fiscal stimulus on Saturday, recognising that financial market concerns over sovereign debt had forced a much greater focus on deficit reduction.

 

The communiqué of the meeting made it clear that the G20 no longer thought that expansionary fiscal policy was sustainable or effective in fostering an economic recovery because investors were no longer confident about some countries’ public finances. “The recent events highlight the importance of sustainable public finances and the need for our countries to put in place credible, growth-friendly measures, to deliver fiscal sustainability,” the communiqué stated.

 

http://www.ft.com/cms/s/0/786776b4-708f-11df-96ab-00144feabdc0.html

Europe double dip, and their effort to get out of the double dip will cause US double dip. Just like US effort to get out of recession causes Euro double dip. My take at least.





http://michaelscomments.wordpress.com/2010/06/04/the-census-shores-up-the-employment-rate/

One British government source said today that Osborne was keen to repeat the exercise in Britain, a reconfiguration of the old British "star chamber" in which spending ministers used to appear before the chancellor and prime minister if they could not reach agreement on their budget with the Treasury. "A small group of ministerial heavyweights and hitters and top officials will test colleagues' budgets and their methods of service delivery and challenge them to find ways of doing more for less," one Whitehall source said.

The decision to turn to Canada for inspiration in reducing Britain's record £156bn fiscal deficit is a telling illustration of the coalition's belief that drastic action is needed to restore stability to the public finances. Osborne, who has already announced £6bn of spending cuts this year, will outline the overall level of spending cuts for next year in an emergency post-election budget on 22 June. He will then set out the cuts department-by-department in the autumn.

The prime minister will balance his gloomy words by echoing his Liberal Democrat deputy, Clegg, who told the Observer that there must be no repeat of the "harshness" of the retrenchment of the 1980s. Cameron will say: "I want this government to carry out Britain's unavoidable deficit reduction plan in a way that strengthens and unites the country."

 

http://www.guardian.co.uk/politics/2010/jun/06/david-cameron-spending-cuts

The British and their leaders in trouble, who are going to have to « think the unthinkable »



Whatever the supporters of the coalition now running the country may tell, LEAP/E2020 thinks it highly unlikely that this alliance will last more than a few months. The very different structure of the two parties involved (Conservatives and Liberal Democrats are divided on a number of issues), combined with unpopular decisions, is leading this team straight to internal crises for each party and, then, to a government collapse. The Conservatives will play this card because, unlike the Liberal Democrats, they have sufficient funds to « finance » a new electoral campaign between now and the end of the year (12). But the most dangerous underlying stumbling-block is intellectual: to avoid the tragedy which portends, the United Kingdom is going to have to « think the unthinkable », i.e. reconsider its basic beliefs on its insular outlook, its transatlantic « relationship », its relationship with a continent now on the road to complete integration, while, for centuries, it has thought of the continent as a disunion. However the problem set is simple: if the United Kingdom has always thought that its power depended on a divided European continent, then logically, considering current events, it must now admit that it is heading to a state of impotence... and draw the necessary conclusions, i.e. that it too should make a « quantum leap ». If Nick Clegg seems intellectually equipped to make such a leap, neither David Cameron’s Conservatives, nor the British leaders altogether, seem mature enough yet. In such a case, Great Britain, sadly, must take the « tragic » path (13).



In any case, this weekend of the 8th/9th May 2010 in Europe dips a number of its roots directly into the Second World War and its consequences (14). It is, besides, one of the features of the global systemic crisis as foretold by LEAP/E2020 in February 2006 in issue N°2: it brings to « an end the West as one has known it since 1945 ».



http://www.leap2020.eu/GEAB-N-45-is-available-Global-systemic-crisis-From-Eurozone-coup-d-Etat-to-the-tragic-solitude-of-the-United-Kingdom_a4666.html

Have you prepared for the soon to emerge financial opportunities as the Stage 3 - Political Crisis unfolds?

I want to lay out the roadmap as simply and clearly as I can. Some no doubt will dispute it. What the nay-sayers need to fully understand however is that the roadmap, which this is part of, has served me remarkably well and resulted in a highly profitable decade. Maybe even more importantly, it has allowed me to sleep peacefully at night. The market drops for the most part have been ‘buying opportunities’ and market spikes have been excellent exit points.

Knowing the trend and destination has made all the difference.

THE ROAD AHEAD

The soon to unfold political crisis will be marked with beggar-thy-neighbor policies that foster political conflict, a currency crisis which dramatically impacts standards of living and a broad curtailment of entitlement programs that will devastate generations of retiring lower and middle income citizens. We are early in what the future may possibly label as the Age of Rage. Paradyn adjustments in expectations and sense of entitlement lay ahead for those living in the developed G7 democracies.

 

http://www.zerohedge.com/article/guest-post-extend-and-pretend-guide-road-ahead

Bill Murphy, Chairman of the Gold Anti-Trust Action Committee delivers his testimony about a whistle-blower in the gold price suppression scheme to the Commodity Futures Trading Commission on 3/25/10.



http://gold-silver-market.blogspot.com/2010/04/andrew-maguire-lbma-whistleblower-story.html

Auto sales fell 1.7% in May; sales at hardware stores plunged 9.3%; department store sales fell 1.8%; and general merchandise sales, which include retailers such as Wal-Mart, fell 1.1%.



Gasoline station sales were down 3.3%, reflecting in part lower gas prices during the month.



The bright spot came from nonstore retailers, which includes online, which saw sales rise 2%. Year-over-year, nonstore retail sales rose 15.6%.



Last week, major chain stores released their own May sales figures that showed uneven results. Retailers including Costco Wholesale Corp., J.C. Penney Co. and Abercrombie & Fitch Co. reported year-over-year sales figures that missed expectations.



http://www.latimes.com/business/la-fi-retail-sales-20100612,0,619643.story







http://www.ritholtz.com/blog/2010/06/government-bank-symbiosis/

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Amen.

The disaster is BP's fault pure and simple (and they are a multinational corporation traded on both LSE and NYSE amongst others), but if BP has consistently been so bad with it's safety record as the US press are publishing then why the hell were the US regulations not enforced against BP before this? Oh right, cash over quality and safety controls for both BP and the US Mineral Management Service.

BP deserves the public thrashing it's getting for this fuck up, but blaming the UK is counter-productive and baseless, especially when the US Mineral Management Service should be in the firing line.

Hawk, stop being mental.

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Yeah the jibe, we gonna kick some ass is a little juvenile. It reminding me too much of Bush talk. Don't get me wrong, this oil spill is a big disaster, and should be handled with care. The potential of big corporation getting away with it is real. But man...



btw. I should have bought euro few days back. I could have been richer by 15% now. imo, euro has proven itself...(sort of, by end of summer we will now.) After that, Germany and france have license to print money and enlarge euro to whatever size they want and people will keep snapping up euro since USD is too debt ridden.  The table will be turned in about 14 months.



http://www.businessinsider.com/investor-confidence-is-double-dipping-2010-6

The Germans are pissed, they are tearing Krugman a new one.



http://www.zerohedge.com/article/ridiculed-americans-everywhere-krugman-now-threatens-gives-unsolicited-advice-germany-pisses

Wolfgang Franz, who heads the German government’s economic advisory panel known as the Wise Men, tore into Krugman — and the US — in an op-ed in the German business daily Wednesday, titled “How about some facts, Mr. Krugman?”



“Where did the financial crisis begin? Which central bank conducted monetary policy that was too loose? Which country went down the wrong path of social policy by encouraging low income households to take on mortgage loans that they can never pay back? Who in the year 2000 weakened regulations limiting investment bank leverage ratios, let Lehman Brothers collapse in 2008 and thereby tipped world financial markets into chaos?” he wrote.

We rarely touch upon the illustrious persona of Mr. Krugman as he tends to do a good job of involuntary self-immolation without our help. That said, we completely agree with the conclusion of the WSJ's Brian Blackstone:

So if Krugman really wants to keep Weber from the ECB presidency, or at least cool some of his support in Germany, he might want to consider damning the Bundesbank chief with praise instead.

nasty



http://www.zerohedge.com/article/crisis-romania-constitutional-court-votes-pension-cuts-unconstitutional-imf-loan-jeopardy-pr#comments

  The Chinese are estimated to have 2 ½ trillion dollars worth of foreign exchange reserves, of which about one quarter is held in euros.  A recent story planted in the London Financial Times by Anglo-American intelligence circles claimed that China was indeed about to dump the euro.  The Chinese government agency which administers foreign exchange quickly denied this report, stressing that China regards Europe is an important area of future investment and economic cooperation.

The best guess possible at this time is that the US and the British had intended to launch a very rapid Blitzkrieg against the euro in May, with the intent of provoking a panic flight of hot money out of the joint European currency within a matter of weeks, before the end of last month.  In this estimate, the German ban on naked credit default swaps and on the naked shorting of German bank stocks was partly a defensive measure against this looming Blitzkrieg, and partly a signal that Berlin intended to fight the Anglo-American predators with additional serious countermeasures.  As a result, the collapse of the euro has now been halted for the moment, and this currency has exhibited greater stability over the past two weeks.

The forces of economic depression in the world economy are colossal, and they cannot be neutralized without the deleting or shredding (as Germany has begun to do) of large portions of the cancerous mass of $1.5 quadrillion of derivatives that is crushing the world economy, and without a wave of debt moratoria and debt write-offs among those nations who have destroyed their public finances by socializing the private speculative and derivatives losses of zombie banks and hedge fund hyenas. Since this is not being done by most countries, the forces of depression emanating from the black hole of world derivatives will necessarily do their destructive work in one direction or another.  During the second half of 2009, the victim was the dollar.  For the last several months, it has been the euro.  If the euro somehow gets off the hook, the British pound sterling might be the next victim. Or, it could be the Japanese yen. This will become clear shortly.

It's times like these when I'm really pleased that I'm a music blogger. I have no money to lose when the world's economy sluices itself down the toilet and when we all have to start bartering goats, it'll feel like a step up.

Geithner and ben are printing money via bank of England. teee hee....

This is not hedge fund accumulation, as Caribbean Banking Centers, traditionally the locus of HF accumulation saw a $14 billion increase in May, and if it is China, as is widely rumored, why was there an increase in Bill holdings? This is increasingly appearing as shadow Fed debt monetization operation, operating out of the United Kingdom. Hopefully someone with far more executive level access (NYT?) than us, will dare to challenge the status quo, and facilitate their credibility and book sales, by asking the right people the right questions to explain this confounding observation...

 

http://www.zerohedge.com/article/chinese-treasury-dump-brings-its-total-holdings-one-year-low-uk-continues-exponential-accumu

 

Surely, the US consumer will demand that banks open up the spigot and provide cash to everyone no matter what their creditworthiness, simply as a result of all the excess money floating around. Will lowering the IOR to 0% at that point help? Not at all due to massive problems such a move would create in the shadow banking system. Very much contrary to expectations of lowering the IOR to 0%, Bernanke in fact provided reasons for why such a move would make no sense:

"… Lowering the interest rate it pays on excess reserve—now at 0.25%—could create trouble in money markets, he said.



" 'The rationale for not going all the way to zero has been that we want the short-term money markets, like the federal funds market, to continue to function in a reasonable way,' he said.



" 'Because if rates go to zero, there will be no incentive for buying and selling federal funds—overnight money in the banking system—and if that market shuts down … it'll be more difficult to manage short-term interest rates when the Federal Reserve begins to tighten policy at some point in the future.' "

In other words, all those who say QE2.0 will do nothing to stimulate the economy are correct, as all such a greenlighted action would encourage is the warehousing of yet more cash by banks. And since banks have no incremental incentives to lend it out, it doesn't matter if the Fed's liabilities are $2.5 trillion or $2.5 quadrillion. Instead of stimulating inflation, which is the end goal, all such an action would do is to create further doubts about the stability of the dollar, which in turn, as Ambrose Evans-Pritchard discussed, is a sure way to go to hyperinflation without first passing either Go, or inflation. Hyperinflation: not in the sense of a pull-driven rise in prices from cheap consumer credit, but a complete collapse of faith in the monetary unit of exchange, likely predicated by a rush to physical commodities and a collapse in the paper system supporting the forced shorting of commodities such as gold. And with Treasuries yielding next to zero courtesy of the expectation of the Fed becoming the end buyer for all paper, and stocks surging to infinity, on the assumption that the Fed will not allow the failure of any risk assets, the end result will be the most divergent market in history, in which both inflation and deflation are priced at the very margins with no gray area inbetween (a theme we have been observing increasingly more often on the pages of Zero Hedge). While that may be good in the short-term for long-only holders of any asset classes, in the medium run (not to mention long), it means the end of the financial system, as the Fed will be caught in a Catch 22 whereby it needs to sustain the perception that it will print into infinity to maintain the divergence, or else the convergence will be one of catastrophic proportions. Of course, even the continued decoupling between inflation and deflation will ultimately eat away at the core of the monetary system, resulting in the complete destruction of the dollar. And with both inflation and deflation priced in at the extreme margin, the only sure alternative will be non-paper based forms of exchange. And unless someone can come up with a substitute to the 2,000 year old legacy cash alternative of gold, it is obvious what real asset class will benefit at the end, as society once again reverts from a monetary system to something far simpler, and far less encumbered by the scourge of any society that are Central Banks.

http://www.zerohedge.com/article/discount-window-borrowings-plunge-just-11-million-lowest-2007-and-other-observations-future-

the FOMC is more likely to embrace a new asset purchase program?climbing aboard QE2 to help avert a double dip, so to speak?though both are certainly possible. The most likely timing of these larger steps would be late 2010 or early 2011, as the jobless rate approaches 10%. The asset purchases would likely be for Treasury  securities, and to have a meaningful effect, total at least $1trn.

As we have long anticipated, QE2 is a certainty as the Fed is now out of all bullets, and can only proceed with the nuclear tactical option. This will once again achieve nothing, and no incremental borrowing will occur by Main Street, but will only double excess reserves held at banks, in the process shooting all risk assets into the stratosphere (merely courtesy of the fact that those who now trade the markets, the primary dealiers, have endless access to zero-cost money via the Fed), making the inflation/deflation debate moot: for everyone who has access to the Fed's discount window and zero-cost capital, assets will explode resulting in inflation for commodities of all types (when the downside is zero, the upside-downside analysis is irrelevant), and likely spilling into all risk assets (stocks), now that the 10 Year is approaching a laughable 2.5%. With the permanent guaranteed bid on the curve courtesy of the madmen at the Fed, look for Treasuries to surge even more, making the inflation-deflation disconnect reach ridiculous levels (but will at least allow the US to monetize its own debt indefinitely and fund its isane budget). The outcome will simply be another round of middle class destruction, as prices for critical items surge (especially those not counted in the core CPI), while all other goods that depend on access to bank credit (housing and other big ticket items) will see their price fall, leading to an acceleration in the inflation-deflation disconnect, as it spills into the real world. We have no doubt now that the end result of this continued monetary insanity will not be the avoidance of a double dip, as Goldman hopes, but a social upheaval which finally overturns the corrupt and criminal status quo.

http://www.zerohedge.com/article/goldman-explains-imminent-launch-1-trillion-qe-2-muses-dreaded-double-d

I guess the bank of england gonna have $300B UST magically appear on their book again.