Yesterday I said "Investors will talk about this terrible jobs data in the coming week; however, I believe the main topic will be Italy. The European financial tumor continues to spread, as I have repeatedly said, and should make for an interesting week.
But don't worry; more bailouts will come in Europe from bankrupt countries to bankrupt countries, with counterfeit-cash conjured up out of thin air...Las Vegas magician style."
Boy was I on the mark. The market was slammed because of it; because of the PIIGS.
PIIGS is an acronym to describe several countries in Europe - their financial condition to be precise. By some accounts, this started with PIGS as far back as 1979; however, due to the recent financial turmoil and extra "I" was added for Ireland.
The countries referred to by the PIIGS acronym are; Portugal, Ireland, Italy, Greece, and Spain. These countries, especially Greece have a long history of debt defaults or other bond related problems, thus the grouping...and in that order. Since the insane global housing and debt bubbles found their respective pins - and popped - PIIGS has become a common reference.
But none of the influential folks on Fraud Street and in academia wanted to believe that these countries could create a problem. Surely more phony paper currency would be printed and all potential problems would go away. "After all, this has worked for the Americans for decades" was probably oft-repeated in European power circles.
Instead of coming to grips with these problems, the Europeans continue to follow (sadly) the lead of the Americans: kick the can down the road, and LIE when necessary. But somehow this continues to surprise people who should know better - like the media.
From the AP:
But don't worry; more bailouts will come in Europe from bankrupt countries to bankrupt countries, with counterfeit-cash conjured up out of thin air...Las Vegas magician style."
Boy was I on the mark. The market was slammed because of it; because of the PIIGS.
PIIGS is an acronym to describe several countries in Europe - their financial condition to be precise. By some accounts, this started with PIGS as far back as 1979; however, due to the recent financial turmoil and extra "I" was added for Ireland.
The countries referred to by the PIIGS acronym are; Portugal, Ireland, Italy, Greece, and Spain. These countries, especially Greece have a long history of debt defaults or other bond related problems, thus the grouping...and in that order. Since the insane global housing and debt bubbles found their respective pins - and popped - PIIGS has become a common reference.
But none of the influential folks on Fraud Street and in academia wanted to believe that these countries could create a problem. Surely more phony paper currency would be printed and all potential problems would go away. "After all, this has worked for the Americans for decades" was probably oft-repeated in European power circles.
Instead of coming to grips with these problems, the Europeans continue to follow (sadly) the lead of the Americans: kick the can down the road, and LIE when necessary. But somehow this continues to surprise people who should know better - like the media.
From the AP:
July doesn't look so promising anymore.
The European debt crisis appears to be widening, with concerns about government debt defaults spreading beyond Greece to much larger countries like Italy and Spain. If that happens companies that do business internationally could see their revenue and profits decline as European countries and companies curtail purchases. What's more, a widespread financial crisis could cause a credit crunch in Europe and elsewhere.
"Appears to be widening" and "spreading" and "if that happens" and "widespread financial crisis could cause a credit crunch" - really? Is this new to the Associated Press or has it been busy covering sensationalist bulls#*t like the Casey Anthony trial while Rome is burning?
And that gets us to today's market decline: Rome indeed, but Italy to be more correct. On Bloomberg television we heard "Italy cannot afford to pay the interest rates it's paying right now," Andrew Bosomworth, a fund manager at Pacific Investment Management Co., said in an interview on Bloomberg Television today. "Its debt is unsustainable if we project into the future these sorts of interest rates levels, so we do need something to change - be that a policy response, be that a change in attitudes in the markets."
The same debt problems of Greece, Ireland, and Portugal are festering in Italy. Although we also know that Spain is part of the group, not much has been said about it...until today. Yes, even Spain's bond market was taken to the woodshed on Monday. More from the AP, Italy and Spain, Europe's third and fourth largest economies, have seen bond yields rise sharply. It's the latest sign that investors are less willing to hold the debt of those countries. Italy's largest banks, UniCredit SpA and Intesa, fell sharply on European exchanges. Some investors believe several of Italy and Spain's financial institutions might not pass an upcoming stress-test for European banks.
The European debt crisis appears to be widening, with concerns about government debt defaults spreading beyond Greece to much larger countries like Italy and Spain. If that happens companies that do business internationally could see their revenue and profits decline as European countries and companies curtail purchases. What's more, a widespread financial crisis could cause a credit crunch in Europe and elsewhere.
"Appears to be widening" and "spreading" and "if that happens" and "widespread financial crisis could cause a credit crunch" - really? Is this new to the Associated Press or has it been busy covering sensationalist bulls#*t like the Casey Anthony trial while Rome is burning?
And that gets us to today's market decline: Rome indeed, but Italy to be more correct. On Bloomberg television we heard "Italy cannot afford to pay the interest rates it's paying right now," Andrew Bosomworth, a fund manager at Pacific Investment Management Co., said in an interview on Bloomberg Television today. "Its debt is unsustainable if we project into the future these sorts of interest rates levels, so we do need something to change - be that a policy response, be that a change in attitudes in the markets."
The same debt problems of Greece, Ireland, and Portugal are festering in Italy. Although we also know that Spain is part of the group, not much has been said about it...until today. Yes, even Spain's bond market was taken to the woodshed on Monday. More from the AP, Italy and Spain, Europe's third and fourth largest economies, have seen bond yields rise sharply. It's the latest sign that investors are less willing to hold the debt of those countries. Italy's largest banks, UniCredit SpA and Intesa, fell sharply on European exchanges. Some investors believe several of Italy and Spain's financial institutions might not pass an upcoming stress-test for European banks.
Guess what we learned of Spain just this evening? Some of its regions (like States in the US), the Castilla La Mancha region to be precise, has revealed the truth behind it's heretofore BS accounting: it is TWICE as broke as previously revealed. The newly elected President of the region says the finances are 100% worse than she was led to believe before the election.
But hey, what's a little (OK, a hell of a lot) debt if you can make the taxpayers foot the bill? To be sure, there is a lot of stupidity (read: blame) to go around, but a great deal of this debt was issued by the private banking mafia - and shouldn't a poor trade or poor loan be eaten by the trader or bankster that made it? No, say the elitists and their handlers, who just happen to be the private banking mafia of course.
Again from the AP, "What the European Union is trying to do is keep the problem contained at a sovereign level and not have the infection spread to the banking system," said Jack Ablin, chief investment officer at Harris Private Bank. "To see a bank drop that much that fast suggests there may be a breach."
Oh, just the SOVEREIGN level? Just the whole damn NATION? Can you believe that was said?
Using my decoder ring I read "What the European Union is trying to do is stick the slack-jawed yokel with the bill. Compared to us bankers, he's a useless life form anyway. What we can't let happen is to have the infection spread to the banking system. If we have to pay for our bad loans how will we ever pay for that 3rd Lamborghini on order, and the hookers, and the cocaine, and the house in the Hamptons or the South of France?"
It was absurd to believe that the European debt crisis was over a few weeks ago with the so-called (3rd or 33rd?) bailout of Greece. Frankly, I doubt that saga has ended the 2nd act yet.
Trade Date: 7/11/11
E-Mini S&P Trades*
(before fees and commissions):
E-Mini S&P Trades*
(before fees and commissions):
1. OTF sell @ 10:33am at 1319.00 = -0.50 & b/e (2 lots)
2. FT sell @ 12:29pm at 1316.00 = -0.25 & -0.50 (2 lots)
3. Algorithm positions (4)
4. "Reading the Tape" positions (2) ...combined Secret's, Algo, & "Reading the Tape" total...-7.25
2. FT sell @ 12:29pm at 1316.00 = -0.25 & -0.50 (2 lots)
3. Algorithm positions (4)
4. "Reading the Tape" positions (2) ...combined Secret's, Algo, & "Reading the Tape" total...-7.25
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