EYE-BALL Guru on – The Continuing Global Financial Crisis –

August 4, 2011
The-EYE-BALL-GURU
Title:
The Continuing Global Financial Crisis
once again exposing past incompetence …
The CFA major News headline brief arrived and read like a perfect storm of ongoing events … all confirming there is a headless panic happening all over the world … all interconnecting but being acted upon independently – and all directing towards an inevitable reckoning that nobody wants to consider or deal with.These headlines were: [they can be read on-line – using this link.]

[Linked Story] Japan moves to counter yen’s sharp appreciation
Japanese Finance Minister Yoshihiko Noda said the government intervened in the foreign exchange market to halt a rising yen, which is damaging the nation’s economy. He gave no information about the size of the intervention. Noda said Japan will intervene more when necessary to protect its prospects for recovery.

Comment: If it is good enough for the Japan Central Bank to intervene to stop its currency from appreciating – why is Mr Swan the Australian Treasurer – content to just let market forces play roulette with the $A?

His inability to put any policy forward to stop the A$ rise is costing $10’s of billions in trade revenue loss – it is doing irreversible harm to our Tourism industry – hurting all Retailers, suffocating all our Miners and allowing our once only resources to be shipped off-shore at a fraction of the value they earned before the A$ appreciated.

Then there is all the small business owners trying to compete on the global marketplace – the manufacturing – the agriculture industry – there is not a sector in Australia that is reeling from the impact of the A$’s rise.

Global investors have turned the A$ and ‘resource’ boom into a global market investment ‘play’ that everybody is using to strip wealth from Australians and put that wealth in the hands of off-shore investors.

The task in managing the Australian economy and protecting our natural resources and economy is beyond the skill levels of our Treasurer.  He is completely out of his depth as are his advisors in understanding the market forces that are at play.  His incompetence and lack of responses to the ongoing crisis and happening in ‘full view’ of the world – can be considered as ‘gross negligence’.

His comments – ‘… we have some experience in managing financial crisis’  – and are well placed to do so again …’ – draws reason to comment that ‘reality’ is not something Mr SWAN likes to deal with – or is capable of responding to.  His total lack of understanding demands he offer up his resignation and place himself on the ALP backbench to serve penance for his contributory role in allowing Australia’s wealth to be ripped from its shores.

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[Linked Story] U.S. corporate-bond yields fall to historic low
The average yield on U.S. investment-grade corporate bonds fell to an all-time low of 3.51%, according to Bloomberg. The previous record-low rate, 3.53%, came Nov. 4. JPMorgan Chase got a 4.35% yield on a $1.25 billion auction of 10-year notes.

Comment: Right now – US Corporate Bonds have an unofficial higher credit rating than US Treasuries. The debt-ceiling deal has not even dry – yet there is no alleviation in the global stress of a US default on its debt obligations.

The US$ remains the reserve currency of the world – trade contracts for the last 40 odd years have been written in US$’s – that is all about the change and the world is as ambivalent about what that really means – as it is about Madoff, Mubarak, and all the other corrupt Dictators and Global Leaders along with the Corporate conglomerates who feed off that corrupt food chain. i.e. News Corporation and the like.

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[Linked Story] Danish official calls for consolidation of banking sector
Danish Finance Minister Claus Hjort Frederiksen said the banking sector should consolidate to better weather difficult market conditions. “A structural adjustment needs to take place in the Danish banking sector; we have many small banks,” Frederiksen said.

Comment: The contagion impact of Europe’s debt crisis is spreading – Denmark sees itself being dragged into the quagmire and this story is a pre-emptive strike to stave off a crisis within the Danish Banking sector. In recent days news about Spain and Italy and their imminent defaults has weakened European markets and driven investors out of equities – where they go is like watching a frenzied building escape when the ‘fire’ alarm has been raised.

For 3+ years Fund Managers have been hunting the world trying to find a place to invest their clients wealth with the primary and only goal being to protect the base capital value. Opportunities in this vein are diminishing – the safest has been to commodities/resource trade – but A$ and use the high interest levels in Australia to add to the currency appreciation adding to the trade return.

Gross Returns over a two year period of 67% if you’re a US Investor – and 37% if you’re a Japanese investor have been made since the GFC playing this trade … similar returns in other currencies have also been attained. [This story on the CASH and CARRY Trade can be read here. Images presented in that post are again shown below.

Cash and Carry Trade

A$ v US$ Cash and Carry Trade

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The markets are finally realising that Central Banks have no ‘silver’ bullet – there is no fix to the problem.  For 30+ years the western world has partied on a credit card binge – all provided for by willing Banks to take advantage of Central Banks and Government Leaders trying to stay elected by creating prosperity through ‘supply’ economics.

It’s time for the world to take a reality check and turn off the GDP dependent drivers – recheck the inflation protocols – both in terms of their benchmark components – and the sleight of hand exclusion over the years of energy and other very sensitive price indicators – all on account of them wrecking the economic modeling that allowed the forecast more predictable and easier to sell – in other words the world needs to take a dose of reality as opposed to the ‘rubbery’ approach computer modeling can and has produce for the sake of producing an outcome that is in line with Government wishes in how to hoodwink the facts – yet produce a creditable and gullible media pitch that remains convincing.

Right now the lies and crap that is being dished up and swallowed by the globe – is as unpalatable as having to drink your own piss and eat your own crap.

Creditability is gone – nobody trusts anybody anymore – politicians are still standing at the water cooler patting themselves on the back and drinking the coolade – still wanting the gravy ride to last forever.  They  are now faced with responsibility none of them were born for.

None would know how to not lie or deceive the public – none would know or understand the truth of their fraud unless it was delivered in the form of a court ordered subpoena.

Making them appear before an independently conducted enquiry to hear and face all they are responsible for – would be like a revisit to the era of the French Revolution and the trials that followed.  These Political Leaders and their fate should be the same – a hobbled and exposed march to the guillotine to face an aristocrat fate worthy of corrupted and a morally bankrupted life compass’ …

The whole political process … no matter what country you lived in is flawed. The world has been short-changed … and those responsible will willingly fade from the stage and live their lives never having to be accountable for their crimes …

Beware everybody – and as said before at this site – there is nobody smart enough to fix the problems the world will have to face in coming months and years.

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The EYE-BALL GURU …

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  1. Warwick
    August 5, 2011 at 3:49 am

    I have just woken to see what the ECB has done overnight/

    As Italy and Spain slowly get sucked into the vortex by credit default swap pricing, and where they are too big for ECB to sort out “too big to fail” has ECB joined the concept of quantitative easing.

    Free floating currencies are on life support.

  2. August 5, 2011 at 8:21 am

    The fall in the A$ – [down to $1.04 from $1.10 earlier this week] – suggests there is some profit taking and unwinding of the A$ ‘cash and carry’ trade happening. I expect it to continue with a breech of parity in coming days –

    The ‘too big to fail’ assumption will fast become a ‘hope’ trade as the markets skittishness confirms the pressure on Leaders unable to make correct decisions – save the Banks – but a year or two later the view is – ‘let the Country go’ – it’s a dam burst and nobody knows where or when the damage will stop …

    The stress levels to bail the European P.I.G.S. – and the other Nations that are certain to be swallowed up as the vortex of this ‘black hole’ event widens – it places everybody in survival mode…

    Nobody can stop this ‘perfect storm’ – all done of our own making … the question now is whether the retreat will be absolute – or whether is will be a 20-30 year stranglation …

  3. Ghost of yoda
    August 5, 2011 at 8:56 am

    “Right now the lies and crap that is being dished up and swallowed by the globe – is as unpalatable as having to drink your own piss and eat your own crap.

    Creditability is gone – nobody trusts anybody anymore – politicians are still standing at the water cooler patting themselves on the back and drinking the coolade – still wanting the gravy ride to last forever. They are now faced with responsibility none of them were born for.

    None would know how to not lie or deceive the public – none would know or understand the truth of their fraud unless it was delivered in the form of a court ordered subpoena.

    Making them appear before an independently conducted enquiry to hear and face all they are responsible for – would be like a revisit to the era of the French Revolution and the trials that followed. These Political Leaders and their fate should be the same – a hobbled and exposed march to the guillotine to face an aristocrat fate worthy of corrupted and a morally bankrupted life compass’ …

    The whole political process … no matter what country you lived in is flawed. The world has been short-changed … and those responsible will willingly fade from the stage and live their lives never having to be accountable for their crimes …

    Beware everybody – and as said before at this site – there is nobody smart enough to fix the problems the world will have to face in coming months and years.”

    These are your words! Think about what you have said! Then analyse what you said leading up to it.
    Your message was fine until your rage overtook your logic and you became irrational.
    You see for people to take note of what your saying, you have to appear to be coherent.
    Your “drink piss and eat crap” nearly stopped me reading, only I felt compelled to tell you, what I am saying now. Please note.
    The message itself can be less important than the way you say it.

    Now the French revolution maybe a highlight in your political understandings, but it was hardly an example of justified democracy. France is hardly an ornament to society 200 hundred years later?
    You would like to have a judgement…..who would do the judging?….the people who advocate they drink their own piss and eat their own crap?

    In the land of the blind he with one eye is king, untill someone comes along with two eyes.

    Who do you know that has two eyes? Sorry Oddball, I have only everseen you with one, and I was not sure which eye I was looking through when I made that observation!

  4. August 5, 2011 at 9:30 am

    Hi Ghost of Yoda – the choke/gag feeling you felt when your read – ‘drink your own piss and eat your own crap’ obviously resonated within you as you digested that image – it was intentional … for what Global Leaders have served up is exactly that – unpalatable …
    I do not shrink from the metaphoric phrasing …

    This opinion is absolute in its presentation of the truth in the opinion – feel free to debate the content – not the way the message is delivered …

    That is the style of the Author and whilst is contains bile – rage and anger – it is delivered the way it is delivered because it is aimed that way – making a message palatable often diminishes the strength of the message … if the barb is warranted – it is best delivered as bluntly and directly as possible …

  5. August 5, 2011 at 10:40 am

    It’s not like the Financial Markets are indifferent to logical interpretation and understanding – but when individuals in Politics and as Leaders offer themselves up as persons who have the answers – then they become ‘fair game’ and deserve what comes at them by way of exposing their absolute bullshit when they stand and deliver lies and bluff in response to media questions posed by equally unqualified dunces …

    GURU …

  6. Rayford Runzler
    June 11, 2012 at 12:30 pm

    One again, your articles is very good.thank you!very much.

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