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Friday's Hope & Despair : Ein Bild zwischen Breughel und Bosch
Again a mixed week of extremes which ended on a slightly more positive note with markets finding inspiration in the comments from Nowotny (ESM banking license) and Draghi (ECB prepared to go "all in"). And up we go, the traditional Risk-on-Risk-off ignited, sending EUR/USD and stock markets higher : Keine Atempause, Geschichte wird gemacht, es geht voran !!
Graue B-Film Helden regieren bald die Welt, es geht voran ! Now some amongst you who have been recently following my comments, might be tempted to conclude that I have become a real cynic and that I am watching all this with a big smile from on top of my ivory tower. I hate to disappoint you there because it just ain't true. In fact, the grey B-movie heroes are starting to worry me. In addition, I have become extremely worried about the fall-out or so-called whiplash following the end game of this EMU saga, whatever the outcome.
And so to quote from our live band of today, it might well be the case that we wake up in the very near future in "einem Bild zwischen Breughel und Bosch". And usually this means a pretty "unheimliches gefühl". But what is worse - and referring to our last Friday's recycling story - it can go more ugly if history is any guide: Crisis, mass deflation, protectionism, scape goats and before you know it, you have some kind of war on your hands. And to quote our life band from today again : "Und dann rettet kein Kavallerie, kein Zorro kömmert sich dodrömm..."
So we have to stay alert and always be careful what we wish for. Polarization and the sound of "left, right, left, right" is not exactly the sound I am longing to hear. Because usually it involves boots which are made for more than just walking.
Does it smell like teen spirit ? Or does it rather "Rusch noh Kristallnaach" ? Our second extract from Deutsche Neue /Alte Welle dates from 1983 and refers to 1938. It's a great live Rockpalast version performed by BAP and that's the only positive note to end with. No, correction,we're still gonna have that Friday beer any way, Cheers
70 Comments
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Kris Van der Plas
On 27 Jul, 2012
You know who we need?
Hari Seldon, the mathematician/guide through the Foundation trilogy of Isaac Asimov.
Now he could calculate for us the societal outcome and predict to the hour when it all falls apart.-
christof Govaerts
On 27 Jul, 2012
@Kris
If he can predict the hour, that would be nice. But in which direction will we be heading seconds after this moment has come ?-
Kris Van der Plas
On 27 Jul, 2012
Ah you see but that was Hari's genius: he predicted that too!
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christof Govaerts
On 27 Jul, 2012
@Kris
Well, if he's that powerful, can he say something about the magic euro million numbers, I am willing to share the pot with him, no problemo whatsoever-
Kris Van der Plas
On 27 Jul, 2012
His forte is calculating how societies develop, not random processes. Apparently Krugman was inspired by Seldon...
http://en.wikipedia.org/wiki/Hari_Seldon
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christof Govaerts
On 27 Jul, 2012
@NuN
Oh Yes ! Mind you I am not such a great Costello fan, frequently too complicated to sound well. But this one is briljant I have to admit !
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Nacht Und Nebel
On 27 Jul, 2012
Bittersweet will be the after taste of draghi's lemon-aid .
I am bad actor so if you do not mind I will not be playing Sacco e Vanzetti part.
For those who will stay behind.My dear new jews .I hope you will survive living in a taxflationary world and I hope that someone will slay the draghi.
The world hasn't changed that much they only replaced one big Hilter by a 1000 little Hitlers
http://youtu.be/MPrza6iiCWU-
Nacht Und Nebel
On 27 Jul, 2012
Dear ants do not forget to learn how to dance the Mussolini
http://youtu.be/dmWOExMg3x4-
Nacht Und Nebel
On 27 Jul, 2012
ein schoener junger prinz. verirrte sich im wald.
ploetzlich wurde es dunkel. da packten ihn die
raeuber. doch einer von den raeubern liebte diesen
prinzen. ich liebe dich mein prinz. ich liebe dich
mein raeuber.
http://youtu.be/XfNLORw7r_M
Ah fuck it.Enough drama.Every were I go there is drama/)
http://youtu.be/5ofaoLKPz7c
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christof Govaerts
On 27 Jul, 2012
@NuN
I see you are in a very cheerful mood today !! :)
Andreas Dorau & the Marinas or Spider Murphy Gang can always bring inspiration to our great leaders
http://www.youtube.com/watch?v=Alnw9G8HipU
http://www.youtube.com/watch?v=9lGwr_g6hks-
Nacht Und Nebel
On 27 Jul, 2012
Christof,
I am feeling gassed up after having a free lunch and tasting too much lemon-aid.Don't worry about the free lunch I tolded the one who will pick up the tap that he also must tip the waitress out of his own pocket:
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Nacht Und Nebel
On 27 Jul, 2012
http://www.economist.com/node/21559618?fsrc=scn/tw_ec/les_mis_rables
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Nacht Und Nebel
On 27 Jul, 2012
How will we do that.Europe has become parore-lized?:)
http://youtu.be/_ifJapuqYiU
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Nacht Und Nebel
On 27 Jul, 2012
Christof,
BTW did you that Yves De Blackberry always chooses music from live albums when making hanky panky.That is how he is getting an applause every 3 or 4 minutes.And the object of his lust.I guess they all felt asleep before the muic started.:)
Can I change my name in Vinny Grette?:)-
Nacht Und Nebel
On 27 Jul, 2012
Spanish and Italian bond markets rallied yesterday as investors cheered Draghi’s signal that the ECB is prepared to intervene to reduce soaring yields. Now he has to deliver, or face deep disappointment on financial markets
http://www.bloomberg.com/news/2012-07-26/draghi-boxes-himself-into-a-corner-with-bond-signal-euro-credit.html-
christof Govaerts
On 27 Jul, 2012
@NuN
Yep, but Signore Draghi up until know played it cleverly : ousting Berlusconi and forcing Monti reform packagaes late last year and in exchange we had LTRO 1 and 2 clearing the banks. Then he played it tough without intervening on the markets and forcing European politics to finally do something (summit 28-29/06). And now the ESM banking license (indirect QE via ESM) and the threat of actually intervening, firing silver bullets in a summer illiquid market. Who knows, it even might work !-
Nacht Und Nebel
On 27 Jul, 2012
Mr Market will call his bluff very soon.....I hope he can deliver.
BTW did you ever seen the Biig Bazooka.It looks great on paper but were is the ammo?
If they go to the pawn shop there will be an over supply of euro.
Dad's army is no match for Hannibal's army.
I would call the european bazooka nothing more then just another spruce goose.
http://www.bloomberg.com/markets/rates-bonds/government-bonds/germany/
Will Europe fall apart.No,they just implant a pace maker in the terminal sick patient.She will not die as soon as she will be hoping for thus suffer endlessly..
BTW I did not say that germany will come unhurt.Interest rate will go up there no matter what..If draghi wins german interest rate will go up.If draghi loses ,german interest rates will go up.
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Nacht Und Nebel
On 27 Jul, 2012
Christof,
BTW I enjoyed the Asian Pacific Breweries tasting.Tell your colleague that He is a Tiger .:)
I owe him as brewky.:)
http://investing.businessweek.com/research/stocks/snapshot/snapshot.asp?ticker=APB:SP-
christof Govaerts
On 27 Jul, 2012
@NuN
I will tell Gino, no worries !! Your German analysis on Germany seems pretty straightforward, something I also mentioned to Theo : In public, it seems that Germany is in charge and is capable to pull the strings telling ever one what to. In the back ground, Italy might well be in charge of the game. And about that Bazooka : the BoE and the FED don't have the sufficient amount backing it all up so if they wish, they could go all the way by printing thin air !-
Nacht Und Nebel
On 27 Jul, 2012
Christof,
I think you are right about Italy.
If you lend somebody a bit he becomes your slave.
If you lend somebody all you have ever earned he becomes your worst nightmare and your master.All he has to do to control you is saying the magical B- word :)
Do still remember the Fried Air IPO?-
christof Govaerts
On 27 Jul, 2012
NuN
Oh yes I remember all too well ! Those were the days, when Nina Brink (world on line) posed with a glass of champaign before the media thumbs up, launching at 14 euro and already having sold her stake at a lesser price (ABN Amro) during the roadshow; later she said she secured "een appeltje voor de dorst voor de kinderen"-
Nacht Und Nebel
On 27 Jul, 2012
But I can't remember the name of the CEO of that internet company (another IPO) sitting naked while the reporter was talking an to him:)
He had balls;)-
FV
On 27 Jul, 2012
I remember the company was called Theemperorhasnoclothes Unltd
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Theo
On 27 Jul, 2012
Interesting choice of painting...
These are dangerous times indeed.
Have the strength of your convictions, know what is physically possible and don't get tempted by supernatural solutions not just from out of the box but from out of this world.
"Where does one go from a world of insanity? Somewhere on the other side of despair." T.S. Eliot
Words move, music moves
Only in time; but that which is only living
Can only die. Words, after speech, reach
Into the silence. Only by the form, the pattern,
Can words or music reach
The stillness, as a Chinese jar still
Moves perpetually in its stillness.
Not the stillness of the violin, while the note lasts,
Not that only, but the co-existence,
Or say that the end precedes the beginning,
And the end and the beginning were always there
Before the beginning and after the end.
And all is always now. Words strain,
Crack and sometimes break, under the burden,
Under the tension, slip, slide, perish,
Decay with imprecision, will not stay in place,
Will not stay still. Shrieking voices
Scolding, mocking, or merely chattering,
Always assail them. The Word in the desert
Is most attacked by voices of temptation-
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Theo
On 27 Jul, 2012
@ FV
Too long the whole thing (1500 characters and all )
Here is the rest of part V
The crying shadow in the funeral dance,
The loud lament of the disconsolate chimera.
The detail of the pattern is movement,
As in the figure of the ten stairs.
Desire itself is movement
Not in itself desirable;
Love is itself unmoving,
Only the cause and end of movement,
Timeless, and undesiring
Except in the aspect of time
Caught in the form of limitation
Between un-being and being.
Sudden in a shaft of sunlight
Even while the dust moves
There rises the hidden laughter
Of children in the foliage
Quick now, here, now, always -
Ridiculous the waste sad time
Stretching before and after
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FV
On 27 Jul, 2012
Coordinated action ahead, so it seems : http://www.lemonde.fr/economie/article/2012/07/27/plan-concerte-entre-les-etats-et-la-bce-pour-sauver-l-euro_1739159_3234.html
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FV
On 27 Jul, 2012
Not to mention the war, but something is definitely brewing : http://economictimes.indiatimes.com/news/international-business/greece-should-leave-eurozone-as-soon-as-possible-says-latvia-finance-minister/articleshow/15197262.cms
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Nacht Und Nebel
On 27 Jul, 2012
Fv,
you are right.Stagflation:)and inflation in Germany:)
http://economictimes.indiatimes.com/news/international-business/monthly-inflation-accelerates-in-five-german-states-in-july/articleshow/15197672.cms
Don't trow away your copper money pieces yet.Soon your 5 euro cent pieces will be worth more then 1 euro.:)-
Nacht Und Nebel
On 27 Jul, 2012
http://www.kitconet.com/charts/metals/base/lme-warehouse-copper-1y-Large.gif
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FV
On 27 Jul, 2012
That should be the 10-20-50 eurocents I think : http://nl.wikipedia.org/wiki/Euromunten
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Nacht Und Nebel
On 27 Jul, 2012
Touche,but you get my drift :)So the ECB has a name for copper they call it Nordic Gold .:)So what do they call a 5 euro note?Fools Gold??
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christof Govaerts
On 27 Jul, 2012
@all
Well, it seems European QE season is bound to kick off, and the timing in fact couldn't be better : summer season with low liquidity ; if the ECB starts firing some silver bullets, it can go fast indeed in the other direction. And the announcement effect is probably supporting the market as well-
Theo
On 27 Jul, 2012
@ Christof
Indeed, but we've learned our lesson from the Japan interventions during a time of low volume - minimum effort, maximum effect
"Between midnight and dawn, when the past is all deception,
The future futureless, before the morning watch
When time stops" T.S. Eliot again, who else
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Will
On 27 Jul, 2012
"it can go fast"
We'll see on Monday, if the €/$ breaks thru 1,24 with speed then next stop is 1,27.
On Monday the 1,24 is cross line of downward trend on daily chart.
But for me it feels like the bank boys are just filling their bags for the next leg down...
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Nacht Und Nebel
On 27 Jul, 2012
Christof,
The BoE and the FED don't have the sufficient amount backing it all up so if they wish, they could go all the way by printing thin air !
If that is the solution for the money problem I have a solution for the unemployment problem.We converse every unemployed into a civil servant.
Now we have all the money in the world and everybody has a job .:) -
Nacht Und Nebel
On 27 Jul, 2012
If the euro falls further asset inflation will corner the ECB even more or will they brake the last rule they stand for?
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Theo
On 27 Jul, 2012
@ NuN
Draghi comments yesterday were precisely with that in mind
the FED cannot afford a strong dollar and the ECB cannot handle a weak euro... so they are like two one-legged guys leaning on each other for support or they can't stand up-
Nacht Und Nebel
On 27 Jul, 2012
Theo,
It looks more like two guys falling into the bottomless abyss hoping that terminal velocity will kick in soon.:)
But you are very lyrical today.The ECB,FED BoE remind my in some way of Cohens
http://youtu.be/riWzWWIubNk
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christof Govaerts
On 27 Jul, 2012
@Theo
Spot on ! The ECB in fact will be the last of the mohecians entering the war zone of currency battles and destroying the yield curve by QE ; and they will destroy the functioning of modern markets as well by sucking up eligble collateral-
Nacht Und Nebel
On 27 Jul, 2012
Also true. The ECB in fact will be the last of the mohecians entering the war zone of currency battles and destroying the yield curve by QE ; and they will destroy the functioning of modern markets as well by sucking up eligble collateral
That is why I have high hopes for my Heinz baked beans currency..all monies are trust but Heinz baked beans is food :)
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Theo
On 27 Jul, 2012
@ Christof
exactly
If it did, it might as well dig its own grave
To me that will be the sign of Game Over
Why I also thought those (always Americans!) calling for parity as a solution do not have Europe's best interest at heart
Let's also not forget that Europe buys its energy priced in USD. A falling EUR means that commodities prices would have to fall further which would threaten many US allies, especially in the wake of preparing a war
from my topless mountain I should be able to have a view of Pirin's highest peak Vihren = vortex, chaos, whirl
I won't be going there. I just want to have a good look at it
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Nacht Und Nebel
On 27 Jul, 2012
Theo,
The FED cannot afford a strong dollar and the ECB cannot handle a weak euro..So true.Europe need a strong currency if they wants buyers for those .European Thin Air Bonds .-
Theo
On 27 Jul, 2012
@ NuN
Yep.
Thin Air Bonds only work if you are already high on high altitude air
just like Desert Treasurys ( I just thought of that one, inspired by your Thin Air Bonds) are only a mirage of a Safe Water Well-
Nacht Und Nebel
On 27 Jul, 2012
Theo,
If you guard my veggies I will guard yours.:)Cambodia you say:) We do need a endless supply of fresh water.
http://youtu.be/thYL4kGCcFQ
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Nacht Und Nebel
On 27 Jul, 2012
and the Us need a weaker dollar for a stronger equity market.:) I think I will cover my hiney for now :)
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christof Govaerts
On 27 Jul, 2012
@All
And there you have it
http://www.bloomberg.com/news/2012-07-27/europe-may-turn-to-bond-buying-to-ease-strain-on-debtor-states.html
Europe may move toward a new round of joint bond buying to ease borrowing costs in Spain and Italy as German Chancellor Angela Merkel and French President Francois Hollande pledged to do everything to protect the euro.
Germany and France are “bound by the deepest duty” to keep the 17-nation currency bloc intact, Merkel and Hollande said in a joint statement after they spoke by phone today
The ECB is preparing a plan to buy bonds in the secondary market in the coming weeks to be followed by purchases in the primary market by government-financed bailout funds, newspaper Le Monde reported today.-
Theo
On 27 Jul, 2012
That guy Hollande needed to be told off like a child
Now we have his commitment to a strong euro as well.
The politicians need to get their shit together or the ECB cannot do it alone... like he was suggesting at first-
Nacht Und Nebel
On 27 Jul, 2012
The politicians need to get their shit together.Ooooooh;we are so F........ :(.
Hollande is an bigger idiot then Le Petit Poucet
So the ECB will buy for about 3 months 6 times the amount they were buying before.
Still Americans will be buying the paddy bonds not the chorizo bonds. the ECB is hoping:)
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Will
On 27 Jul, 2012
@Christof,
Clearly an act of hugh panic by both Merkel and Hollande.
Something that Draghi knows that happenend in the market (a major W-european bank in trouble? more banks in trouble?) and that we, the public, don't know yet.
Panic of Draghi + Merkel + Hollande equals major problem detected ! Watch out....
Any Belgian or/and French banks, anyone ?-
Christof
On 28 Jul, 2012
@Will
Could well be the case so this could be a pre-emptive strike. On the other hand, if they want to buy time in order to give the project a last chance and the commitments are fulfilled, may they just have go make this move, it's simply the tactics of the last resort,brutal but necessary and unavoidable
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Olivier
On 27 Jul, 2012
Have kind of a feeling people @ GS will be quite pleased with the volatility created by Mario's comment suggesting new Bond Buys and the expected ensuing reaction by other (German) ECB members. Curious to see what next week will bring...
UP - DOWN; doesn't matter as long as it fluctuates and GS can anticipate-
Christof
On 28 Jul, 2012
@olivier
Yep, il polpo goldman and its tentcles. I nevertheless am quite surprised over draghi, clever, innovative and bypassing because Ltro 1 and 2 were perfectly disguised qe moves, well within his legal powers. And he didn't make a move on bond buying until the announcement now. So i give him credit forbthat
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Will
On 27 Jul, 2012
kill the DRAG-hi-ON
"A spokesman for the Frankfurt-based central bank said in a statement read over the phone earlier today that there haven’t been any changes in its positions on bond purchases. **The Bundesbank has repeatedly said in the past that it views such buying critically because it blurs the line between monetary and fiscal policy.**"
what did merkel say today?
ha-hum... -
Theo
On 28 Jul, 2012
Coming from America
http://www.reuters.com/article/2012/07/27/us-usa-europe-geithner-idUSBRE86Q1EA20120727
He ain't coming over to lecture this time -
Nacht Und Nebel
On 29 Jul, 2012
The reaseon why the euro hasn't fallen as fast as I thought.Why not include the BoJ into the equation?
Who needs a stronge euro:
1;Europe's thin air bonds salesmen
2.The US for a strong equity market in order the re elect Nobama
3 Japan in order to compete with Germany,weaker yen
4.Russia, " a new free money round= even higher commodity prices"
Is this the plan?
give the ESM a banking lincence.The men behind it are by law untouchable.All debt will become "european debt".So Spain can lend the money they pay and every European will be responsible for that debt.When it is time to repay spain passes the tab to the flemish,dutch,finnish and german taxpayers.
The European Solidarity Mechanism will turn Europe into Great Wallonia in the end (10 years)
but for now the spending can go on and the french and german banks are saved.
Buyers would be the BoJ if Europe guarantees Spanish and Italian debt.Russia would buy euros again and the US companies could see better results in the next quarters
International Monetary Fund data show the dollar accounted for 62.2 percent of global currency reserves in the first quarter, unchanged from the previous three months and down from 72.7 percent in 2011. The euro’s share fell to 24.9 percent from a peak of 28 percent in 2009.
http://www.bloomberg.com/news/2012-07-26/russia-raised-share-of-u-s-assets-cuts-french-german-holdings.html-
Nacht Und Nebel
On 29 Jul, 2012
5.China needs a strong euro for it export
6.The UK as well
7.Golman Sachs needs a strong euro for its commodity trading
8.last but not least I need a strong euro so I can get the f.ck out of here :)-
Will
On 29 Jul, 2012
your number 8 refers:
And I need a very, very weak € so that I can come to Belgium and buy a fancy free standing house with my dollars so that I can switch summers with North World and South World, just as I planned years ago. Moet kunnen hé. Eerst ik IN en dan jij OUT, right?
End of 2012---> euro at >80$cent
End of 2013---> euro back at <1,30$
both happy.
héhé
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Nacht Und Nebel
On 29 Jul, 2012
Will,
My dear friend.I will tell this country biggest secret.The best way to make a small fortune in Belgium is by entering this shithole with a big fortune.
Better take a look at Bulgaria housing is about 1/5 of the cost here and you would only pay 10 percent tax not 66 percent.-
Nacht Und Nebel
On 29 Jul, 2012
Belgium the land of a billion and one kind of taxes
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Will
On 29 Jul, 2012
@Night and Mist:
after 25 years of expatriate, I figured all those things that you write out, already. Me, I am waiting patiently for the housing bubble to deflate and then let my $$ do their work. No need for me to move permantely to Bel. Six summer months in the south and six months in B should be fine to me, staying as a taxpayer in the south (10K km from B.), so avoiding to sponsor your fancy politicians and your social pamper society. Yes, taking the best from both is also a good solution, and I think I am not a profiteer as I worked hard to get that little bit together. Now @ 65, I should grab my chances, although needing a semi collapse of the housing bubble in the next 2 years in B.
Did you know that you can stay in Belgium, as a Belgian, taxfree? 6 months less 1 day in Belgium, 6 months plus 1 day in other country....bingo.-
Nacht Und Nebel
On 29 Jul, 2012
Will;
If we would find a 1000 good men like you Jean Luc the plumber would lose at least 150 kg in weight and 200 k euro in wages.
Yes,I know about that but why would I spend 5 months in a prison cel when I can stay a whole year in Heaven for half the price?
I find it very interesting that when I book an on line ticket Amerstam or Brussels - Bangkok via an american online ticket agency I pay about 650 USD.If I book online here I pay 780 EUR and if I book via a belgian travel agent I pay at least 980 euro for the same ticket./Must be the price of their 1 minute service:(
This country is so sick.Did you know that I earn money by doubling my vacation abroad.I earn money while I not work while I lay in a hammock drinking a beer reading a book?.Well;that is how sick this country has become.
A hand made cashmere suit cost here about 750 euro over there about 80 euros to a 120 euros.Must I go on?
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