Tuesday - February 09, 2010

THERE ARE 8 BILLION, COUNT EM, EIGHT BILLION SHORT SELLERS ON THE EURO …..

Do you suppose some folks just happen to know something?

H/T Rich K for emailing me the article from the Telegraph.

I read papers but ... (Drew, where do I get a shamed face avitar for this?) [ Drew: um, like this? ] I hardly ever read the financials. It’s my wife who reads the business section.
She it is who informed me about the short sellers.

This is some serious stuff I guess. ??  What the hell do I know? What?  Me Worry? 
I just need to know how the Q’s are running (QQQQ) the tech index.  Buy at the lo and sell later. Or use em for covered calls.  Outside of that, I didn’t even know there was a banking crises till I read it on BMEWS one day. lol.

OTOH .....  What Rich sent sure did stir up things a bit.  Everything is so connected.  But guess what?  It was the same in the 1920s.
SUPER book called LORDS of FINANCE. Very fast read and not overly tech heavy.

And BTW ... oh boy do we know about margin calls.  Been there and don’t ever want to revisit that country.

Greek Ouzo crisis escalates into global margin call as confidence ebbs

For the third time in 18 months the global financial system risks spinning out of control unless political leaders take immediate and radical action.


By Ambrose Evans-Pritchard

Flow data shows an abrupt withdrawal of German and Asian capital from Club Med debt markets. The EU’s refusal to offer Greece anything beyond stern words and a one-month deadline for harsher austerity – while admirable in one sense – is to misjudge how fast confidence is ebbing. Greece’s drama has already metastasised into a wider systemic crisis. The world risks a replay of the Lehman collapse if this runs unchecked, this time involving sovereign dominoes.

Barclays Capital says the net external liabilities of Greece are 87pc of GDP, or €208bn (£182bn). Spain is worse at 91pc (€950bn), and Portugal worse yet at 108pc (€177bn); Ireland is 68pc (€123bn), Italy is 23pc, (€347bn). Add East Europe’s bubble and foreign debts top €2 trillion.

The scale matches America’s sub-prime/Alt-A adventure and assorted CDOs and SIVS of the Greenspan fling. The parallels are closer than Europe cares to admit. Just as Benelux funds and German Landesbanken bought subprime debt for high yield with AAA gloss, they bought Spanish Cedulas because these too had a safe gloss – even though Spain’s property boom broke world records. They thought EMU had eliminated risk: it merely switched exchange risk into credit risk.

THE REST OF THE ARTICLE IS HERE

AND THERE’S THIS BIT FROM ANOTHER PAGE , SAME PAPER.
Naturally, I see the name Soros and it’s akin to waving a Nazi flag at a BarMitzvah.

First the hedge fund manager, Jim Rogers, co-founder with George Soros of the Quantum Fund, says “sell any sterling you might have. It’s finished”. Then along comes another veteran of the hedge fund scene, Bill Gross of Pimco, to insist that “the UK is a must avoid. Its gilts are resting on a bed of nitroglycerine”.

Posted by peiper     on 02/09/2010 at 10:20 AM   
Filed Under: • Finance and Investing • UK •  
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