Spain and Italy ban short-selling to calm volatile markets as debt crisis spawns global sell-off

Too little, too late, but God love 'em for tryin', right?  CNN, via The Extinction Protocol:

July 23, 2012 – ROME – Securities regulators in Spain and Italy both instituted short-selling bans Monday as financial markets tumbled. The move is designed to limit the downward pressure on markets by preventing investors from betting against shares of certain companies. The ban in Italy applies only to short positions in shares of banks and insurance companies, according to the Commissione Nazionale per le Società e le Borse, or CONSOB. Spain’s Comisión Nacional del Mercado de Valores (CNMV) banned short positions in shares of all companies under its purview. Both bans are temporary. In a statement, CNMV said European shares have been hit with “extreme volatility” that might cause the “disorderly functioning” of financial markets.(Artfully worded, no?) Regulators in Italy and Spain, as well as France and Belgium, imposed a temporary short-selling ban in August 2011, at the height of the last major flare-up in the eurozone debt crisis. Back in 2008, the Securities and Exchange Commission banned short selling for 799 companies in the wake of Lehman Brothers’ collapse. The move was aimed at restoring confidence and stemming a steep stock sell-off. The bans could limit the selling in the short-term, but longer-term, investors want concrete evidence that the global economy is turning around. Investors are currently concerned that Spain might be forced to seek a bailout similar to those taken by other troubled euro area economies, although Madrid reiterated Monday that it will not need additional aid.

At this stage of the endgame, today's actions are pointless.  Pointless.

Deep Into The Lieborgate Rabbit Hole: The Swiss Hedge Fund Link?

Just because 16 banks did the rigging, doesn't mean Almost Everyone Else didn't know about it, and use it to their advantage.  Derivatives are firmly involved now, and so is Geneva, Switzerland.  The derivatives Leviathan rises from the depths; The monster's size grows quickly to the horizon, then beyond.  We gasp at its size, unable to process..  Zero Hedge connects all the dots.  Excerpts:


That Lieborgate is about to spill over and take down many more banks is well known: as previously reported that the world's biggest bank Deutsche Bank, has become a rat for the Liebor prosecution having turned sides. The reason: "Under the leniency programs of the EU, companies may get total immunity from fines or a reduction of fines which the anti-trust authorities would have otherwise imposed on them if they hand over evidence on anti-competitive agreements or those involved in a concerted practice." However, just like in the case of Barclays (with Diamond), JPM (with Bruno Iksil), UBS (with Kweku) and Goldman (with Fabrice Tourre), there always is a scapegoat. Today we find just who that scapegoat is. From Bloomberg: "Regulators are investigating the possible roles of Michael Zrihen at Credit Agricole, Didier Sander at HSBC and Christian Bittar at Deutsche Bank, the person said on condition of anonymity because the investigation is ongoing. The names of the banks and traders were reported earlier today by the Financial Times."



Of course, as so very often happens, the link between the investigated firm, and the person in question no longer exists - after all what better brute way to tie up loose ends, than to fire the person in question at some point in the past: "Michael Golden, a spokesman for Deutsche Bank, confirmed that Bittar left the bank last year and declined to comment on the investigation." Not surprising. Yet this is where the story gets interesting, and provides a whole new twist on the Lieborgate scandal.


Notice that up until now, the only firms that have been implicated in Lieborgate are, by definition, the BBA member banks which provided daily USD Libor fixings. However, nowhere is it said that this information never exited this close knit cabal of 16 manipulating banks. After all, there are $2 trillion in AUM (a number that is likely $5 trillion when accounting for all the rehypothecated assets at the Prime Brokers) out there run by unregulated hedge funds, and all of these entities would certainly find a way to make a pretty buck on even the tiniest 'manipulated', and leveraged Libor arbitrage. And would also pay a pretty penny to get that info. Which brings us back to Bittar. And LinkedIn.
And:

The original LinkedIn list continues (much to the likely chagrin of at least one SocGen trader and one more CA-CIB banker), but we have seen enough, and the pattern is forming: it appears that the bankers who were allegedly involved in Libor manipulation in some capacity in their previous lives working for banks, decided to quietly depart under mutually acceptable conditions and find new lives, still trading Libor and IR derivatives, in some of the best known, and even less regulated, Swiss hedge funds and private banks.




Our question then is the following: while much has been said about Lieborgate as being purely associated with the 16 BBA USD fixing member banks, just who else made money, and is the traditionally quiet and always under the radar Swiss financial community about to be exposed for having profits far more from Lieborgate than any of the BBA member banks?


Because if the stigmatized traders were accepted with open arms at various Swiss hedge funds, one would think there may, just may have been, some quid pro quo in the past (for those who have worked in the financial industry this needs no further explanation).


We eagerly await the answer, and perhaps the Swiss regulators to finally wake up to their own "pristine" financial industry.


So really..  Just about anyone remotely on the inside could pay for manipulated rate information, and now, it's possible that many, many, many people did, and they all profited from it;  A lot.  All on the backs of those who didn't.  Also known as "muppets," also referred to as "customers." 

LIBOR goes global in three..  Two..

IMF Says Japan And Spain Are Done, "Debt Ratio Will Never Stabilize"

Needless to say, this is not good news..  Zero Hedge:  (Emphasis theirs..)

The IMF believes that advanced economy deficits will decline by about 0.75 percentage points of GDP this year which 'strikes a compromise between restoring fiscal sustainability and supporting growth". However, continued focus on nominal deficit targets runs the risk of compelling excessive fiscal tightening if growth weakens. In addition, there is a risk in the United States of political gridlock that puts fiscal policy on autopilot and results in a sharp and sudden decline in deficits—the “fiscal cliff.” What is more troubling is the significant upward revision to all of the peripheral European nations (with Greece now at 171% Debt/GDP in 2013 versus 160.9% forecast only 3 months ago). While the average debt-to-GDP ratio among advanced economies is projected to continue to rise over the next two years, surpassing 110 percent of GDP on average in 2013, debt ratios will by then have peaked in several advanced economies - though rather explosively they do not see debt ratios for Spain and Japan stabilizing.

JAMES KUNSTLER: We're Entering A Dangerous New Period In History

He's not wrong.   Businessinsider:
News that that a swarm of termites deep inside the British banking system have been fiddling the interbank interest rates (LIBOR) for years in order to systematically vacuum a few billion pence off the exchange floors for themselves is the latest blow to the credibility of the global money system - and probably a fine overture to a looming climactic implosion of the gigantic, creaking, smoldering, reeking, duck-taped edifice of broken promises, booby-trapped hedge obligations, counterparty follies, central bank euchres, sovereign flim-flams, and countless chicanes too various, dark, and deep to smoke out.


Next, we'll probably hear that Lloyd Blankfein over at Goldman Sachs has been tinkering with the rotation of the earth in order to gain a few micro-milliseconds of advantage in his firm's high frequency trading rackets. After all, back in 2008 Lloyd himself claimed to be "doing God's work."


In short, world banking is now hopelessly pranged, and I am not at all sure the project of civilization (modern edition) can continue by other means. The impairments of capital formation are now so profound that no one and nothing can be trusted.


Not only are all bets off, but nobody will want to make any new bets - and by that I mean venture to invest accumulated wealth (capital) in some useful project designed to sustain human well-being. What remains is just the desperate hoarding of whatever remains in assets uncontaminated by the pledges of others to pony up.


All this points to a dangerous new period of political history, a deadly Hobbesian scramble to evade the falling timber in a burning house as the rudiments of a worldwide social contract go up in flames. Such is the importance of legitimacy: the basic condition for governance, especially among supposedly free people.


You can meddle in a lot of distributory issues - who gets what - but when you mess with the most basic operations of money to the extent that no one is sure what it's really worth, or what it represents, then you are deeply undermining society. This is now the condition that is set to blow up republics.


Reality dislikes fraud and accounting tricks. Reality is serious about settling scores. Reality eventually intervenes and puts an end to monkey business. What will it be this time?


Europe and America have been buying a month here, a month there (of a fragile, continuing status quo) on the installment plan. That's what QE, TARPs, LTRO, EFSF, Operation Twist, et cetera, are all about. Think of them as multi-billion dollar (euro) fire extinguishers bought on credit cards. Europe is now completely out of credit to buy more fire fighting equipment.


For months now it has been down to whether Germany intends to keep supporting Spain, Italy, Greece, Portugal, Ireland, the French banks (and a few stray forgotten places between the backwaters of the Danube and the Gulf of Finland) without any say in how they manage their allowance. Much as Germany enjoyed the Ponzi heyday of the Euro zone, a big "tilt" sign now flashes ominously over the continent, signaling game over. All fall down.


Everybody gets real poor real fast. M. Hollandaise over in Paris has already sealed his fate with his stupid plan to return to "go" on the Ponzi game-board. Merkel's tattered scarecrow of a coalition will blow away in the next national election. The Club Med countries will soon boil up in street-fighting, Holland and Finland will drink themselves to death, and across the channel outsider Britain will fizzle away to a burnt bowl of mulligatawny. That's what the end of the summer looks like to me.


Over here, in this sorry-ass edition of America, the election will look more and more like a World Wrestling Federation staged dumb-show between two catamite hostages of a foul corporate oligarchy. Imagine that horse's ass Mitt Romney spending the next four months denouncing Obama-care, modeled on his own health care reform in Massachusetts, while Obama pretends he has a grip on an economy where the rule of law is absent due to Obama's own omissions and negligence.


And if you can't stand that spectacle, just look around at America itself: a wasteland of futile motoring and discount shopping populated by depressed, overfed clowns bedizened with sinister tattoos, pretending to be Star Warriors. No nation ever seen in human history ever laid such a disappointing egg. Only to have it fry on the sidewalk.____________________________________

You ever get that sneaking suspicion 2013's gonna be real different than 2012?

Also:  I'm in the mood to type like hillbillies talk, that's why.

Forget the PIIGS, the EU as a Whole is Insolvent

Impending Systemic Collapse has an ominous ring to it.  Zero Hedge has the bad news..  Excerpts:

Europe is heading into a full-scale disaster.
You see, the debt problems in Europe are not simply related to Greece. They are SYSTEMIC. The below chart shows the official Debt to GDP ratios for the major players in Europe.


As you can see, even the more “solvent” countries like Germany and France are sporting Debt to GDP ratios of 75% and 84% respectively.



These numbers, while bad, don’t account for unfunded liabilities. And Europe is nothing if not steeped in unfunded liabilities.


Let’s consider Germany. According to Axel Weber, the head of Germany’s Central Bank, Germany is in fact sitting on a REAL Debt to GDP ratio of over 200%. This is Germany… with unfunded liabilities equal to over TWO times its current GDP.
To put the insanity of this into perspective, Weber’s claim is akin to Ben Bernanke going on national TV and saying that the US actually owes more than $30 trillion and that the debt ceiling is in fact a joke.
What’s truly frightening about this is that Weber is most likely being conservative here. Jagadeesh Gokhale of the Cato Institute published a paper for EuroStat in 2009 claiming Germany’s unfunded liabilities are in fact closer to 418%.

And of course, Germany has yet to recapitalize its banks.


Indeed, by the German Institute for Economic Research’s OWN admission, German banks need 147 billion Euros’ worth of new capital.

To put this number into perspective TOTAL EQUITY at the top three banks in Germany is less than 100 billion Euros.

And this is GERMANY we’re talking about: the supposed rock-solid balance sheet of Europe. How bad do you think the other, less fiscally conservative EU members are?
Think BAD. As in systemic collapse bad.

Tickticktick..

Deja Vu: Pasok Is Warming Up To Coalition With Only New Democracy

Ahh, the great PASOK flip-flop.  Nice..  Sensible Greeks, you have every reason to believe the two parties that brought you to the brink of financial DOOM will find the way back to prosperity!  Good for you;  Here's a participation ribbon!  Rest up, Riot Dog; You'll be busy soon enough!  Zero Hedge.  Excerpts:

One of the biggest caveats from yesterday's Greek election result was that Pasok announced it would only participate in a broad coalition government that includes Syriza. Obviously Syriza promptly turned down the offer, which has now put the ball back in the court of the Pasok leader - Venizeloz. Being a career politicians, and knowing quite well what the final outcome of the Greek fiasco would be, it was only a matter of time before the former minister of defense, finance, and yes, sport, would flip flop, and hint that a government of just ND and Pasok would also work, as the alternative is just too harsh to even consider. In other words, we may shortly get a repeat of the precisely same leadership that brought Greece to 23% unemployment and a completely destroyed financial and economic system, with Veni back in the role of finance minister once again.

And:
Does this mean a Greek government just may happen, evading a 3rd Greek election in as many months? We will know for sure by tomorrow night, when Pasok said is the deadline by which a new government has to be formed. As for bets on the longevity of the new cabinet, we have no idea what the spread is, but we take the under.


What's the definition of insanity?  Happy fun times are just ahead with your "new" old leaders, Greece!  Opa!  When you take back to the streets, remember to hydrate?  It's gonna be a long, hot summer!

Guest Post: The Tiresome Eurozone Soap Opera Has Entered Re-Runs

Articulate and succinct.  From Charles Hugh Smith from Of Two Minds.  Zero Hedge.  Excerpts: 



The Tiresome Eurozone Soap Opera Has Entered Re-Runs
The Eurozone "drama" needs some fresh plot developments; it has become boring.

What's more tiresome than a hastily rehearsed soap opera that replays the same boring plots again and again? Re-Runs of that soap opera. The Eurozone "drama" is now in re-runs and I for one am switching channels. Nothing will change until some critical part of the worm-eaten, corrupt construct of artifice and denial collapses in a heap. Until then, all we have is replays of the same boring plot lines:
Put-upon Greece: We were just minding our business here in the sunny south, living happily on borrowed billions in a thoroughly corrupt Status Quo, and suddenly we're debt-serfs squeezed by rapacious Eurozone enforcers of the banking cartel. What did we do to deserve this? It's not fair.
Put-upon Germany: We were just minding the store here, racking up 40% of our GDP in exports and raking in bank profits loaning money to our Eurozone compatriots, when suddenly everyone who's lived beyond their means demands that we refinance their debts because we're rich. Excuse us, but did anyone look at how we got rich? Hard work, cuts in spending, high taxes and a tight lid on wages. What did we do to deserve this? It's not fair.
Married couple in counseling: France and Germany: It's all his/her fault. They never bothered to understand me, etc.
The lit-fuse terrorist: Either refinance our debt and bail out our Status Quo, or we're gonna blow up the Eurozone!

Is anyone else tired of the entire cast and threadbare plotlines?

Pasok Throws A Monkey Wrench Into Coalition Discussions  Zero Hedge.  Full post.

As reported in the previous post, the Greek PASOK party of former PM G-Pap may have thrown a grenade into coalition discussion, following an announcement by Katerina Diamantopoulou that Pasok will not join into a coalition government with ND unless Syriza also joins said coalition. Which Syriza stated moments ago it would not do. The question then comes whether ND can form a government (150+ seats) with any of the other remaining parties (up to and including neo-nazi New Dawn or the communists... why is there no Pirate party in Greece?). The answer is most likely not, but not before some serious horse trading shows that the second Greek elections has achieved nothing, and the world now has to look forward to a 3rd Greek election round, some time in August, and then another, and then another, until no more assets are left to be plundered from the state which will have no head for a long time. Incidentally, just as we predicted on May 3 in "Previewing The First Of Many Greek Elections"



As summarized by Keep Talking Greece:

Next Question: What government?
•PASOK official Anna Diamantopoulou said that PASOK would not join a coalition government without SYRIZA.


•PASOK considers citizens have down voted the party’s policies therefore it can not join a pure ND-PASOK government.

Short answer?  The whole thing meant nothing, really.  No one is any safer in their current position, and the volatility will continue.

Eurozone epidemic meltdown: Spain in emergency crisis, Danish banks downgraded

From The Extinction Protocol.  Excerpts:


Spain in emergency crisis: “We’re in a situation of total emergency, the worst crisis we have ever lived through” said ex-premier Felipe Gonzalez, the country’s elder statesman. The warning came as the yields on Spanish 10-year bonds spiked to 6.7pc, pushing the “risk premium” over German Bunds to a post-euro high of 540 basis points. The IBEX index of stocks in Madrid fell 2.6pc, the lowest since the dotcom bust in 2003. Chaos over the €23.5bn rescue of crippled lender Bankia has led to the abrupt resignation of central bank governor Miguel Ángel Fernández Ordóñez, who testified to the senate that he had been muzzled to avoid enflaming events as confidence in the country drains away. Markets are on tenterhooks as Spanish yields test levels that forced the European Central Bank to respond last November with its €1 trillion liquidity blitz. “Nobody is short Spanish debt right now because they are expecting ECB intervention,” said Andrew Roberts, credit chief at RBS. “If it doesn’t come — if we take out 6.8pc — we’re going to see a hyberbolic sell-off,” he said.
And:
Mr Roberts said the collapse in Spanish tax revenues is replicating the pattern in Greece. Fiscal revenues have fallen 4.8pc over the last year, and VAT returns have slumped 14.6pc. Debt service costs have risen by 18pc. The country is caught in a classic deflationary vice: a rising debt burden on a shrinking economic base. “Once you get into such a negative feedback loop, you can move beyond the point of no return quickly,” he said.

It's not like one country's financial implosion stops or gets better--Greece, Italy, Portugal, and Ireland are still in bad shape--The focus just switches whenever new, horrible economic data is reported.  In hindsight, the multiple paths to economic Armageddon will become clear when they all become critical simultaneously.  Buckle up:  Here we go!

Germany Walks Away From Greece

This is going to be a nasty break up.  Zero Hedge.  Excerpts:

Preparing for Greece’s exit from the Eurozone has been picking up momentum and has reached critical mass—on the way to a fait accompli. Still unspeakable in public discussion last year, it has become a routine topic at all levels of government. While everyone at the very top still hues to the line that Greece should stay in the Eurozone, out of the other side of the mouth comes the but—especially since the focus is on Spain, the real problem, the one problem that the Eurozone will have trouble digesting.


Even if it could digest bailing out Spain or losing Spain, the next step up, Italy, due to its size, is beyond bailout and would cause the Eurozone to fracture into its component pieces—unless the ECB decides against all treaty limitations and stiff German opposition to monetize directly and without qualms any sovereign debt that needs to be monetized. And even that would tear up the Eurozone because Germany and a handful of other countries would refuse to be tied to that kind of loosey-goosey management of their currency.

There are political realities in Germany, where Chancellor Angela Merkel, slipping in the polls, is trying to decipher the scribbles on the wall. Her people, who vacation in Greece more than any other people, have handed her some clues: 60% said they wanted Greece out of the Eurozone, a jump from November when an already shocking 49% had wanted them out, according to a ZDF Politbarometer poll released Friday. Only 31% wanted Greece to remain in the Eurozone, down from 41% in November, with 9% not giving a hoot.
And:
But the next big battle may actually revolve around keeping Germany in the Eurozone: 50% of the respondents saw more disadvantages than advantages, up from 43% in February; only 45% saw more advantages, down from 51% in February. The more costs and risks rise for Germany, the more this number is going to skew away from the euro. A scary trend for Eurozone bailout freaks. And suddenly Germans woke up to the headline, "Greeks Pay less Taxes"—taxes being a sore subject for Germans who pay out of their noses to get their welfare-state budget into balance. For a debacle without equal, read.... The Confiscation Conundrum in Europe.



"The notoriously tax-sinning Greeks paid their government even less than before," the article began unnervingly. Turns out, Reuters had gotten two anonymous “senior” finance ministry officials to talk: Greeks were refusing to pay their taxes in euros in anticipation that they could soon pay them in drachmas, albeit with minor penalties. And lacking a government, they wanted to wait for the outcome of the next election on June 17, which hopefully would produce a government, any government. And so tax revenues in May were on track to drop 10%. Outside of Athens and Thessaloniki, tax revenues would fall between 15% and 30%. First capital flight then quiet bank runs, and now a refusal to pay taxes to a government they don’t have, in a currency they might not have much longer.... The Greeks are preparing for a reversion to the drachma, and they're trying, very understandably, and very smartly, to protect whatever they can—which, of course, simply speeds up the process of reverting to the drachma.

Forced to answer, I'd say that by July 1st, Greece's Eurozone exit will be the foregone conclusion.  Momentum in Greece's June 17th election is swinging towards anti-austerity Syriza, and they won't hesitate to drop the hammer on all prior agreements. Bank runs have already begun, and will most likely intensify.  Greece's collapse will also effect non-E.U. countries like Romania and Bulgaria.  Greece's exit also hastens Spain and Italy's demise.  Further chaos in Greece really could get this whole party started.  Yeah.  By July 1st, things should be coming to a boil. 

Buy canned goods and water!

Greece: Before And After

The populist tsunami forms..  If these polls hold true, Greece is about to change history.  Is this Greece's exit from the euro zone?  Is this the beginning of the end for the entire European Union?  Where's Riot Dog?  Zero Hedge.  Excerpts:

In one of the most fascinating psychological shifts, there has been a massive shift in the perspective of the Greek electorate since the election two weeks ago. Almost as if the size of the actual votes for Syriza, the far-left anti-bailout party, gave citizens 'permission' to be angry and vote angry. The latest opinion polls, as per Credit Suisse, show the center-right New Democracy party crashing from 108 seats to only 57 as Tsipras and his Syriza colleagues soar from 52 seats to a hugely dominant 128 seats. Is it any wonder the market is pricing GGBs at record lows and 'expecting' a Greek exit from the Euro as imminent given the rhetoric this party has vociferously discussed. On the bright side, the extreme right Golden Dawn party is seen losing some of its share.

The new election date for Greece is June 17th.  Can the bankers prevent a bank run meltdown before then?  Fun election fact:  More than one half of Greek policemen voted for the Neo-Nazi New Dawn Party.  That ought to be a great conversation starter and laugh riot during the upcoming real riots!

This Week In Global Economic Chaos..

If Greece Exits, Here Is What Happens  Zero Hedge thinks maybe/grain of salt.  More importantly, will Greece follow Iceland or Germany?  Greek skata hits fan in three.. Two..


An unprecedented financial crisis is lurking on the horizon as Market Oracle warns of Greece’s exit from the Eurozone  The Extinction Protocol.  Excerpts:



What may be lost in the noise that is the mainstream press is the fact that Greece has not been in a recession or even a depression, Greece has been in a state of slow motion economic collapse on the scale of past economic collapses such as that of Argentina but so far without the ability to default, devalue and inflate.
And:
Greek politicians traded insults and accusations Sunday following an effort by President Karolos Papoulias to broker a coalition government, increasing the possibility of new elections in the debt-stricken country. Papoulias called together the leaders of the three biggest parties on Sunday, a week after indecisive elections and three failed attempts to form a government. A default by Greece could drag down other troubled governments such as Spain and Portugal. Europe is keeping a nervous eye on Greece, fearing that the political chaos there could lead to defaults on debt that could threaten the future of the euro. Greek failure — or refusal — to make debt payments could hurt banks across Europe. The eurozone economy is fragile, and any financial shock could plunge the region into a deep recession, a development that would ripple across the globe. A default by Greece also could drag down other troubled governments such as Spain and Portugal. 

Merkel's CDU Trounced In Most Populous State Elections Over Austerity; Pirates Strong  Also from Zero Hedge.  Excerpts:

Another weekend, another stunner in local European elections, this time as Merkel's CDU gets a record low vote in the state elections of Germany's most populous state North Rhein-Westphalia. According to a preliminary projections by ARD, the breakdown is as follows:
•SPD:39%


•CDU: 26%


•Greens:12%


•Pirates: 7.5%


•FDP: 8.5%


•Left:2.5%
And:

Chancellor Angela Merkel's conservatives suffered a crushing defeat on Sunday in an election in Germany's most populous state, exit polls showed, a result which could embolden the left opposition to step up attacks on her European austerity policies.



Merkel remains popular at home for her steady handling of the euro zone debt crisis, but the sheer scale of her party's defeat represents a heavy blow that could tilt the German political landscape and leave her more vulnerable to domestic critics.


According to an exit poll for public broadcaster ARD, the centre-left Social Democrats (SPD) won 39 percent of the vote and will have enough to form a stable majority with the Greens, who scored 12 percent.


The two left-leaning parties had run a fragile minority government for the past two years under popular SPD leader Hannelore Kraft, whose decisive victory on Sunday could propel her to national prominence.


Merkel's Christian Democrats (CDU) saw their support plunge to just 26 percent, down from nearly 35 percent in 2010, and the worst result in the state since World War Two.

Merkel's attention will now be divided between the financial crisis and domestic concerns, like keeping her job.  I think Germany has begun to de-stabilize.  Albeit a long way away, this vote was a pretty visible step in that direction..

Three JPMorgan executives expected to resign over $2 billion loss  This is only the beginning.  Of everything..  Raw Story.  Excerpts:

Three top executives at JPMorgan are expected to resign this week in the wake of a $2 billion trading loss. 



The Wall Street Journal reported on Sunday that the three include Ina R. Drew, the head of the risk-management division responsible for the loss, along with the top executive and a managing director at the London branch that placed the trades under her direction.

According to several JPMorgan executives, Drew had offered her resignation several times since the extent of the losses became known in late April, but CEO Jamie Dimon had previously refused to accept it.

The situation changed however, when Dimon revealed the loss on Thursday and it led to a 10% drop in the firm’s stock price the next day. “We made a terrible, egregious mistake,” Dimon has since admitted. ‘There’s almost no excuse for it.”

The Jaime Dimon Countdown-To-Quitting clock begins!

Australia the most ‘obvious’ bubble in 30 years, says economist  Financial Post.  Excerpts:

As far as bubbles go, they don’t get more obvious than Australia, according to one economist and noted bear.



Albert Edwards, economist with Société Générale, put out a note on Thursday morning whose title says it all: “The biggest bubble in recent history is heading for the mother of all hard landings.”


Mr. Edwards cites Australia’s extreme reliance on the Chinese economy as the foundation for the current bubble. After all, Australia, a global heavyweight in mining, is dependent on the global commodity boom that China has largely helped fuel over the last decade.


“All we have in Australia, at its simplest, is a credit bubble built upon a commodity boom dependent for its sustenance on an even greater credit bubble in China,” he said.
And:
Mr. Edwards adds that the current bubble has been precipitated by the fact that Australia has not experienced a recession for more than 20 years — making investors complacent as a result.



“The absence of any recession since 1991 has led Australians to have an excessive appetite for debt in the belief the future will reflect the past,” he said.

And complacency, of course, is a big factor in bubble creation. That has led Mr. Edwards to conclude the following about Australia:


“Of all the bubbles I have seen over the last 30 years in this industry, this one is even more obvious than the rather prominent nose on my increasingly haggard face,” he said.

The rise of the new Holy Roman Empire? EU technocrats plot to create powerful EU president

Let the cloak and dagger shenanigans begin!  Spoiler alert:  The takeover is spearheaded by a power mad German!  Shocker, right?  Express, via The Extinction Protocol. Excerpts:

Senior Eurocrats are secretly plotting to create a super-powerful EU president to realize their dream of abolishing Britain, we can reveal. A covert group of EU foreign ministers has drawn up plans for merging the jobs currently done by Herman Van Rompuy, president of the European Council, and Jose Manuel Barroso, president of the European Commission. The new bureaucrat, who would not be directly elected by voters, is set to get sweeping control over the entire EU and force member countries into ever-greater political and economic union. Tellingly, the UK has been excluded from the confidential discussions within the shady “Berlin Group” of Europhile politicians, spearheaded by German foreign minister Guido Westerwelle. Opponents fear the plan could create a modern-day equivalent of the European emperor envisaged by Napoleon Bonaparte or a return to the Holy Roman Empire of Charlemagne that dominated Europe in the Dark Ages. They are concerned that David Cameron’s coalition Government is doing nothing to prevent the sinister plot. The secret talks were uncovered by Independent Labour peer Lord Stoddart of Swindon.

 This won't end well.

Big Doin's Afoot..

Turkey expels Israeli ambassador, suspends military ties with Israel over flotilla raid  Tick.  Washington Post.  Excerpts:

Turkey says it is expelling the Israeli ambassador and cutting military ties with Israel over the country’s refusal to apologize for last year’s deadly raid on a Gaza-bound flotilla.

And:

Davutoglu also said Turkey was suspending all military agreements signed between the former allies, saying “it is time Israel pays a price.”

This is not a positive turn of events.

New evidence of a massive oil slick near Deepwater Horizon site   Story and video from Raw Story.  Excerpts:

A California nonprofit organization dedicated to the protection and preservation of wildlife has discovered what seems to be a massive oil slick in the Gulf of Mexico near the area of the original Deepwater Horizon spill.

In a flight over the Gulf Tuesday, OnWingsOfCare.org founder and pilot Dr. Bonny Schumaker spotted an oil slick that stretched for nearly 10 miles.

Last week, two Louisiana State University men took a boat into the Gulf and returned with video evidence of large blooms of crude oil swelling up to the water’s surface where the doomed oil rig once hovered.

BP had firmly denied that the well is continuing to leak.

“None of this is true,” they said in a statement.

New Data Supports Previous Fairewinds Analysis, as Contamination Spreads in Japan and Worldwide  The latest video from Arnie Gundersen.  From accompanying article:

Newly released neutron data from three University of California San Diego scientists confirms Fairewinds' April analysis that the nuclear core at Fukushima Daiichi turned on and off after TEPCO claimed its reactors had been shutdown. This periodic nuclear chain reaction (inadvertent criticality) continued to contaminate the surrounding environment and upper atmosphere with large doses of radioactivity.

In a second area of concern, Fairewinds disagrees the NRC's latest report claiming that all Fukushima spent fuel pools had no problems following the earthquake. In a new revelation, the NRC claims that the plutonium found more than 1 mile offsite actually came from inside the nuclear reactors. If such a statement were true, it indicates that the nuclear power plant containments failed and were breached with debris landing far from the power plants themselves.

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Third, the burning of radioactive materials (building materials, trees, lawn grass, rice straw) by the Japanese government will cause radioactive Cesium to spread even further into areas within Japan that have been previously clean, and across the Pacific Ocean to North America.

Burning contaminated materials.  What could possibly go wrong?  Fukushima:  37 degrees North Latitude.  Southern Missouri:  36 degrees North Latitude.  Being globally down wind from Fukushima is awesome.

The Imminent Failure Of The Eurozone Excerpts from Zero Hedge.

Japan, and the E.U. are declining. That is, about one-sixth of the world's population is losing ground. These big economies are the ones that lead the rest of the world, including China. Countries like China, India, and Brazil, depend on the health of the big economies to keep buying their products and commodities so they can grow and generate wealth for their citizens.

What is especially concerning is the blow-up that is about to happen in Europe. It is not something that is happening "over there." In a world that is so interconnected financially and by trade, a sinking Europe is everyone's concern.

Their problems are much the same as ours with a twist. Their governments and central banks have also pursued reckless monetary and fiscal policies and now, effect is following cause. They have more or less followed the same policies as has the U.S., much to the same end. They spent large, engaged in Keynesian fiscal stimulus in a bailout attempt, ran up huge debts and deficits, and their economies are in decline.

The twist is the European Monetary Union (EMU), known as the eurozone. It is as if here in the U.S. there was no federal government and each state was truly sovereign, but there was a Federal Reserve Bank. Some states spend more than others, funding deficits by borrowing huge sums to support programs their citizens wanted. The profligate states want the Fed to buy their debt and float them loans created out of thin air, or otherwise they will go belly up and they will take down many states' banks. The responsible states know they will be stuck with the bill.

Even Goldman Sachs Secretly Believes That An Economic Collapse Is Coming  Before It's News.  Excerpts:

Goldman Sachs is doing it again. Goldman is telling the public that everything is going to be just fine, but meanwhile they are advising their top clients to bet on a huge financial collapse. On August 16th, a 54 page report authored by Goldman strategist Alan Brazil was distributed to institutional clients. The general public was not intended to see this report. Fortunately, some folks over at the Wall Street Journal got their hands on a copy and they have filled us in on some of the details.

It turns out that Goldman Sachs secretly believes that an economic collapse is coming, and they have some very interesting ideas about how to make money in the turbulent financial environment that we will soon be entering. In the report, Brazil says that the U.S. debt problem cannot be solved with more debt, that the European sovereign debt crisis is going to get even worse and that there are large numbers of financial institutions in Europe that are on the verge of collapse. If this is what people at the highest levels of the financial world are talking about, perhaps we should all start paying attention.

There is a tremendous amount of fear in the global financial community right now. As I wrote about the other day, the financial world is about to hit the panic button. Things could start falling apart at any time. Most of these big banks will not admit how bad things are publicly, but privately there is a whole lot of freaking out going on.

I don't know about anyone else, but all this Big Picture Doom is actually having the opposite effect.  The closer we get to whatever will ultimately happen, the calmer I get.  Strange, but much much emotionally lighter, that's for sure..  Have a great weekend.

Random News(and "ish.") Sweep; One Word Descriptor Edition. Sunday, July 17, 2011

Goldman Bet Against Entire European Nations - Who Were Clients - the Same Way It Bet Against Its Subprime Mortgage Clients  Explosive.

First Demonstration of Time Cloaking  Confusomazing.

Woman arrested for squeezing TSA officer’s breast  Honk!

Hail storm damages 40 planes, strands passengers  Unusual..

The 5 Weirdest Things That Control the Global Economy  Surprising.

Ten Years Ago Portugal Legalized All Drugs:  What Happened Next?  Portugal!

ALEC Exposed: State Legislative Bills Drafted by Secretive Corporate-Lawmaker Coalition  Scumbaggery.

Greece Is Now "On.."

Greece passes steep cuts as riots seize capital  AOL News.  Day One of Everything's Different Now.  Excerpts:

The cuts and tax increases passed 155-138, with five voting "present" and backing neither side. During the vote, stun grenades echoed across a square outside Parliament. Acrid clouds of tear gas and orange and green smoke-bomb mist hung in the air.

Several banks and storefronts were smashed, while a Socialist dissenter who backed the government at the last minute, Alexandros Athanassiadis, was briefly assaulted by protesters after leaving Parliament on foot.
Violence continued throughout the afternoon, and smoke billowed from a post office beneath the finance ministry before a fire was put out. Rioters set up burning barricades along Syntagma Square, where demonstrators have staged a sit-in for the past month. Nearby streets were littered with chunks of smashed marble and ripped-up paving stones that had been thrown at police.
A general strike that began Tuesday paralyzed the country, grounding planes, leaving ferries docked and stranding tourists during the busy summer season.

Greece Implodes and War Declared…over 5,000 Police overwhelmed  This was the day before the Austerity Budget was approved.  The Ante is now Upped.

Violent Scenes In Athens As Bloody Greek Riots Keep On Raging  Video from the 29th courtesy of Russia Today, the most trusted name for American News..

And yeah Riot Dog IS Fucking Awesome.  Riot Dog stands with The People.  Riot Dog is coming for ya..

That Loud Boom You'll Hear Is Greece Exploding..

The Real Deal begins later today.  My gut says Austerity measures pass, and Athens begins to ROCK shortly afterward..  If Austerity fails..  The Greek economy goes into collapse, and Athens begins to ROCK shortly afterward.  Maybe, maybe not.  But the Greeks do like to riot, and they're really good at it..  (By no means is this an insult, either.  The No Bullshit political will of the Greek people is inspiring to others living in more complacent regions of the world.  It's good to see that spirit alive and well..  Somewhere..)

Greece and Europe brace for austerity measures vote  The Sofia Echo.  Excerpts:

Greek lawmakers, under the watchful eyes of the rest of the world, are due to vote on a second round of austerity measures that sparked nationwide strikes and violent riots on June 28.

The vote will be held later on June 29.
The outcome of the vote will be vital for the stability of the European economy and for the future stability of Greece which is facing bankruptcy. Resembling a typical Greek drama, the voting process itself has become rife with accusations of betrayal and treachery following revelations in Greek media that there are mavericks in both camps who could sway the result unexpectedly.
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If the government fails to pass the austerity measures, Greece will go bankrupt. The proposed measures will affect the public sector and will consist of the sale of assets as well as higher taxes and more spending cuts.

Massive protests are expected on the streets of central Athens and outside Syntagma Square in front of the parliament building, protests which have the potential to turn violent judging from the past.

WRAPUP 2-Greek lawmakers seen backing austerity, future unsure  Reuters.

Greece's parliament looked increasingly likely to approve unpopular austerity measures on Wednesday, despite violent protests, to secure international funds to prevent the euro zone's first sovereign default.

But with the country on the brink of bankruptcy, it remains uncertain whether a weakened Socialist government can push through laws to implement structural reforms and privatisations in a second series of votes on Thursday, and then stick to a tight EU/IMF-imposed schedule for implementation.
Many economists and investors still expect Greece to default in the medium-term.

Greek leader 'dead man walking', Greek bailout 'collective punishment'  Video courtesy Russia Today, via You Tube.

And Now, To Greece..

Greece: Prime Minister George Papandreou survives by just 12 votes

GREECE'S prime minister survived a key confidence vote, keeping alive a government bid to avert a debt default that could spark a financial maelstrom around the world.

MPs voted 155 to 143 along party lines last night to back George Papandreou, who now faces a critical vote next week on a massive austerity package that Greece's international creditors have said must pass by the end of June.

He is seeking 28 billion euro (s24.8bn) in budget cuts and new taxes and 50 billion euro (s44.3bn) worth of privatisation of public assets. Unless the new measures pass, Greece will not receive the next batch of bailout funds worth 12 billion euro (s10.6bn), and will face a disastrous default in July, when it runs out of money.

A default by Greece could drag down Greek and European banks and renew fears over the finances of other eurozone countries such as Portugal, Ireland and Spain.
And:
As deputies voted, several thousand protesters gathered outside parliament chanting "Thieves! thieves!", shining green laser lights at the parliament building and into the eyes of riot police. Continuing strikes by electricity company workers objecting to privatisation caused a second day of rolling power cuts.

This anger doesn't seem to be factored as a tangible power.  But it is, and it's just begun to fester.