A warm welcome to Evey Hammond

I would like to extend the warmest welcome to Evey Hammond, a very special person to me.

She kindly agreed to co-author the blog, so she will be reporting sentiment and opinions from Germany, primarily in the German language.

Let the Spanish 10Y go to shit

This is a story for any bond manager that still holds Spanish 3Y or 10Y...


As you know, I am living in the piggest of the PIGS. There was an illegal (and you can differentiate illegal from immoral, right?) demonstration scheduled for yesterday. People were called to surround the parliament in Madrid, to let politicians know that people is onto them, that bipartidism is a scam and so is this representative democracy.

Demonstrating anywhere near the parliament is illegal (of course...). Prior to Sept. 25th, government spokespersons compared the citizens call to surround the parliament to the military putsch in '81. Also, I believe the Catalonian independence movement is orchestrated as a smoke courtain to prevent public attention to focus on this occupy movement. I say that because people have been charged with rebellion against public institutions (see the video of police identifying suspects of "talking to more than 20 people in a public park" some days ago and the charge notification below), but none of the Catalonian politicians behind the presumed Catalonian independence have (and what is the most rebellious act than declaring the independence). None of the mainstream Spanish media spent more than 5 minutes talking about the demonstration, but there were a lot of news shows and pseudo-intellectual political debates about the independence.

Earlier that day, different police departments were ordered to stop buses going to Madrid as long as they could. They even got dogs in the buses so as to detect drugs, and treated citizens as if they were criminals.

 

The demonstration, however, was such a success that the Spanish authorities had to legalize it in order not to fill up Spanish prisons. This was not a demonstration of the tipical dog-flute guy with long and unclean hair: many senior citizens were participating.

First, some rioters (I don't know whether they are police insiders or not) broke the fence that acted as security perimeter.

 

However, the rest of the evening was pacific, until it was time for the pigs of the parliament to go to their publicly-funded, luxurious rat holes, so that everything was set up to dissolve the demonstrators. As you can see in the following video, a lot of masked guys (infiltrated police, as you will see later) with red flags approach the riot police in an attacking attitude. They were even scolded by a legitimate female demonstrator. The police then charges against them and then indiscriminately against any demonstrator.

The next video is a compilation video. You can see that the police take a guy. They later bate him up, with some of the riot police putting their shields so as to prevent outside viewers from seeing the torture, and left him paraplegic for the rest of his life.

There is proof that the riot police was involved in the riot attacks that shed blood on an otherwise pacific demonstration. In the next video you can hear "comrade! comrade! I am a comrade! ... Yes, this is a comrade, take it easy!".

After the demonstration, the riot police even got into Madrid's main train station, and indiscriminately charged against both demonstrator and commuter. The best part: you can see thse guys in yellow, they are not police, they are just the station security! This country is sick!

You can even see here threating members of the press (yes, official press!). At the end of the video, when the journalist ask the police officer to identify himself, by giving his police number, he refuses telling him "I'm gonna give you something else".

People took refuge anywhere they could. In a restaurant, "Cafeteria Prado" on Paseo del Prado 16, the owner prevented the police from entering his premises, thus protecting demonstrators. These two pictures are Pulitzer-worthy:

 

 

I am going today with some friends to pay my respects to this guy in his restaurant. I hope I find it open, since there is also a follow-up demonstration (illegally) scheduled for today, in protest for yesterday's repression.

What I want you to see, Spanish 10Y bond holder, is that this situation is no longer sustainable. Spanish people were co-responsible of the housing bubble and didn't give a fuck about industrial loss to China, as long as the State funded their services with public debt, and banks gave them mortgages with no guarantees. Spanish people must learn, suffer, and then build something real with sweat and blood. Get your money out of there, protect the people, protect your money.

Watch this!

Youtube user GGPGrey produces a high quality entertaining videos that might teach you something that you don't know. He has a unique style that will make you love it. You can recognize some elements from the Monty Python, Star Wars, Futurama...

The City of London:

Death to pennies:

 5 Historical Misconceptions Rundown:

Enjoy

A concerned citizen's manifesto

I am strongly opposed to welfare lounge socialism which promotes free rights to everybody as if natural resources had nothing to do with how much seven billion people can consume. Rights are meant to be conquered, as our grandparents did. We are not more intelligent than them, nor are we more pretty or unique.

I am witnessing a constant wealth transfer, a decimation of the middle class and the techofeudalism it leads to. As a consequence, as a citizen of the troubled country of Spain, I proclaim the following manifesto:

1. I shall break every law that is written by any politician. I am not bound to them.
2. I shall evade taxes as much as I can. I have the intrinsic right to defend myself against burglary.
3. I shall convince anybody that it is a patriotic duty to harm any politician if they can.
4. I shall support a civilian government. I want to live in a society of pair, pursuing knowledge and sharing the best of each other.
5. I shall agree on confiscating all their properties and use them to offer the German citizens free vacationing resorts as the only means of paying current public and private debts. It is only the taxpayer the one that has suffered the course laid out by irresponsible politicians whose properties are to be confiscated.
6. I shall not share my talent with the current society until people wake up and rise against this tyranny. I owe ignorant people nothing.

In PIGS land #4, signed, the Analytic Bastard.

Cristiano Ronaldo's butt could belong to the ECB

Despite the fact that I don't like soccer, it was brought to my attention something very funny: the European Central Bank (ECB) could become the new owner of soccer players Cristiano Ronaldo and Kaka. In 2009, the Spanish soccer club Real Madrid was granted a credit of EUR 76.5 million with Caja Madrid, later integrated in Bankia, to recruit both superstars. With Bankia's bailout, the  ownership of both players could end up in the hands of the ECB. The result of this bailout, the entities within Bankia, including Caja Madrid, have lost all their financial assets. Among these assets, Bankia owned an asset securitization fund called "Corporate Assets Madrid V, FTA", which included the credit lent by Caja Madrid to Florentino Perez's club for the transfer of Kaka and CR7. This fund was given by Bankia as collateral so that it could be eligible to participate in the ECB's weekly liquidity auctions that have bought Bankia the much needed liquidity to be able to continue operating. At the present time, the fund no longer belongs to Caja Madrid.

The agreement signed between Real Madrid and Caja Madrid for the reception of the loan, was dated June 23, 2009 and maturing on July 3, 2014, after payment of three installments of 25.5 million on July 3, 2012, 2013 and 2014, and is payable by image rights of both players, which always was the basis on which Florentino Perez justified the return on their huge investment.

Under the present circumstances there are two reasons why the ECB could take over the rights of Cristiano Ronaldo and Kaka: one is that Real Madrid soccer club committed a non-payment of amounts agreed, and two, that Bankia turns insolvent. The club will try to avoid the first one at all cost in spite of the spectacular revenue fall this season. The second one is more than likely should the outflow of Spanish bank depositors.

Back when the deal was closed, the (educated) public opinion was outraged by the favorable conditions of the loan since it coincided with the closing of the credit tap to individuals and small businesses. Today, this agreement may turn against Florentino Perez if the situation spirals into chaos, which right now can not be excluded. And if it does, would have to see what happens with both players, which could ultimately end up changing team and joining the European Central Bank, or more accurately, they could appear as an asset on the central bank's balance sheet.

  
The New York Times puts ACS, the construction company whose president is also Florentino Perez, as an example of the problem of private debt in Spain, which is even worse than the government debt (sovereign) that threatens to place the country in a decade of stagnation. The newspaper cites the case of ACS, "a company with a debt of 9,000 million, double its current market value, and tucked into a frenzied campaign to sell assets and to distance himself from the situation affecting the Spanish economy." "Just as he has used debt to accelerate his company’s remarkable growth, he has borrowed heavily to sign prominent Real Madrid players — from the British star David Beckham to the current Portuguese sensation, Cristiano Ronaldo."

So there you go guys. Some central banks used to back their currency with gold, some others back it with soccer players that make covers on teen magazines.

Alpha, omega, oil

Something is moving in the East. It is something that they don't show on mainstream TV news. It is related, of course, to oil.

Like the prominent magician David Copperfield, your politicians want you focused on the Syrian script even by having Hilary Clinton say that it is natural that Al-Qaeda and the US share similar interest (!!!). What is happening offstage can only be seen as a direct preparation for WWIII. The increasing US interest in the Caucasus region reflecting in meddling in conflicts there, specifically in the Armenian-Azerbaijani conflict.

Some report that US will back Azerbaijan with the intention of having the join the country join the NATO and provide access to its oil fields, therefore encircling Russia and having a Northern access to Iran when the time comes (this renders any theory of imminent Israeli attack on Iran useless).

-[T]he United States and their allies in NATO are facing the fast of the overthrow of Bashar Al Assad’s regime in Syria after which they will set about Iran and then the CIS countries including Russia. For this reason. the strengthening of ties with countries neighboring Iran and Russia meets the US interests.

News.Az interviews political scientist Vafa Guluzade

What can you say about reports that the Pentagon-assigned package of military aid to Azerbaijan will be some $10M to go for improvement of the opportunities of marine forces on war on terror?

It is yet another proof that the United States views Azerbaijan as a very important state with which it is developing a geostrategic partnership in the region. Development of US-Azerbaijani relations meets the interest of both states. And the assignment of $10m to Azerbaijan by the Pentagon testifies to the US interest in deepening military cooperation with our country. The logical outcome of this cooperation will be Azerbaijan’s admission to NATO.

Could you specify terms of the announced admission of Azerbaijan to NATO?
I don’t want to specify terms but I would say that it is about a middle term perspective. The matter is that at the current stage the United States and their allies in NATO are facing the fast of the overthrow of Bashad Assad’s regime in Syria after which they will set about Iran and then the CIS countries including Russia. For this reason. the strengthening of ties with countries neighboring Iran and Russia meets the US interests.
In this case, can the military aid to Azerbaijan by the United States raise concerns in Iran?

Undoubtedly, it can. But it will not affect the US plans, based on their own interests, rather than the interests of Iran or any other country. Openly speaking, Iran is well aware of the US plans to conduct a military operation against it and it is preparing to resist this military operation. As for Azerbaijan, we merely cannot stay aside from US plans related to Iran.

Do the US plans envisage shift of powers in Armenia? There are no doubts that they do. The United States is planning to reduce Armenia’s dependence on Russia and Iran for which they seek to bring their protégé to power in Armenia. The issue is about who it will be and which events will promote implementation of the US plans. Russia is unable to resist these US plans regarding Armenia, since it has no serious resources in terms of army or economics. Additionally, Russia will face the issue of resisting the plans of the United States and their allies in NATO, while in these conditions, Russia will have no time for Armenia.

How would that scenario, you are speaking of, influence the resolution of the Armenian-Azerbaijani conflict over Nagorno Karabakh? The impact will be a most positive one. The Armenian-Azerbaijani conflict over Nagorno Karabakh will be settled in case the indicated US plans come true. The main obstacle on the way to its settlement is Russia…

Tension is on the air. History is never how the victor tells it, nor how you study it on the books or how you see it on TV. What happens behind the scenes is an inherently inverse problem, much like Plato's cave.

Primary actors are preparing for the next large war in the region, which will be a prelude to WWIII. It would be wise to pile up gasoline containers.

Robert Johnson, Chris Hedges, George Carlin

I found these very educational videos that I fell I need to put on the blog.

Robert Johnson, Former Senate Economist, Executive Director of the Institute for New Economic Thinking, and a Senior Fellow and Director of the Global Finance Project at the Roosevelt Institute, speaks about the problems in today's corporate capitalist society. This is a part of Culture Project's "Conversation on Economy", filmed on July 25, 2012 at the IMPACT Festival.

Christopher Lynn Hedges (born September 18, 1956) is an American Pulitzer Prize-winning journalist, and war correspondent specializing in American and Middle Eastern politics and societies. His most recent book, written with the cartoonist Joe Sacco, is Days of Destruction, Days of Revolt (2012). The book, a New York Times best seller, shows the consequences of unregulated capitalism by reporting from "sacrifice zones", the poorest pockets of the United States such as Camden New Jersey and the coal fields of southern West Virginia "that have been offered up for exploitation in the name of profit".

George Denis Patrick Carlin (May 12, 1937 – June 22, 2008) was an American stand-up comedian, social critic, satirist, actor and writer/author, who won five Grammy Awards for his comedy albums.[22]  Carlin was noted for his black humor as well as his thoughts on politics, the English language, psychology, religion, and various taboo subjects. Carlin and his "Seven Dirty Words" comedy routine were central to the 1978 U.S. Supreme Court case F.C.C. v. Pacifica Foundation, in which a narrow 5–4 decision by the justices affirmed the government's power to regulate indecent material on the public airwaves. Here, George Carlin in a very-well composed speech about politicians and the Elite:

Educate yourself!

Spanish bailout scheduled for October, 22nd

I found this on a Spanish-language Internet board, from a poster with excellent track record. The post reads (I leave it mostly Google-translated, it's so funny):

I just spoke to an officer and another Austrian ejpañol in Brussels, who has visitilla to me. I have confirmed this date for redemption formal, just after Galegas elections. Terms of rescue:

1. Pensions KO
2. Unemployment benefits KO, will be left very reduced
3. Government deficit will be reduced to 3% of GDP, regions not meeting to immedately lose self-governance.

It is remarkable that Merkel has agreed the bailout to be requested after the Basque and Galician regional elections. It is even more remarkable that the short-selling ban from the CNMV (Spanish SEC) ends on October, 23rd, as per the 3-month ban establised on July, 23rd. Mainstream media also hint this date, referencing consulting firms. Goldman Sachs even says Spain is to officially announce it next week, with the following agenda:

September 12: German constitutional court gives its blessing to the ESM. Although we expect some procedural riders to be attached to the decision, this would allow German ratification to be completed and the ESM to be established in relatively short order.

September 13-14: Spain to make formal request for EFSF support at the Eurogroup meeting. With a large (and uncovered) redemption looming at the end of October (and under pressure from other Euro area governments), we expect Spain to move towards seeking support.

Second half of September: Conditionality required by EFSF will have to be accepted by the Spanish authorities, presumably requiring a parliamentary vote. In parallel, approval of other Euro area countries for the provision of EFSF support will need to be obtained: in some countries (notably Germany), this will also require parliamentary approval.

By end-September / early October: Memorandum of Understanding (MoU) codifying conditionality is signed, formalising the availability of EFSF support for Spain. At this point, the necessary conditions established by Mr. Draghi for ECB purchases of sovereign debt will have been met, well ahead of
large Spanish bond redemption.

There you go guys, with uncle Benny printing like mad across the pond, risk is on again. Bankia is up 100% from lows. Buy, buy, buy!!!

Spanishtan chronicles

I recently heard this tale from a Spanish acquaintance:

A few days ago, at the McDonalds (btw, shitty place)
I was eating some shitburger while noises start coming to my ear and since I was alone, I eavesdropped the gossip of others.
It turns out that a former employee of McDonald had gone to eat there and of course, she and her female ex-coworkers grabbed a place so that they could catch up what had been going on with their lives.
At one point a McWorker asks her:
- "Hey sista, wearin' new tits?"
- "Yeah, you see, I got operated a few months ago"
- "And how's it like, how much it costs?"
- "Very well sista, I notice that guys look at me more, paid EUR 6000 in the clinic XXX"
And a few minutes later they departed and the one wearing silicone told them: "Hey, you need someone? I am still unemployed and all that..."

Why the hell a girl who is unemployed spend EUR 6,000 in increased breast size but is so desperate to  return to McDonalds to ask for a job.

I read once on Zerohedge that the large Spaish demonstrations in June were against IMF and the Troika. I argue that those sistas don't have the slightest notion of what the IMF is.

Retrocinema: Network (1976) and Rollover 1981 (1981, obviously)

Like a quality historical library, one must have works that capture the essence of their time. In this post, I comment on two movies released within a span of 5 years from each other, that reflect very well the feelings, fears, values and fashions of their time.

Network tells the story of the news anchorman Howard Beale, who is about to retire. His share had been constantly dropping and the death of his wife had affected his personal life, so the only thing he had left was his job, which would also be taken away from him.

All of it drives him mad, and he becomes the people's prophet against the adversities of the recessionary seventies. When disclosing a deal with the Saudis, Beale faces the chairman of the corporation, who changes his mind into telling people they are not sovereign individuals but part of a continuum that serves a corporative world with no values whatsoever. This is not greeted by the masses and Beale's audience drops, sealing his fate.

A very seventies movie, with a very disappointing and unfinished ending, it however shows how soon values were pragmatically discarded.

On the other hand, with Wall St. and economic woes being more known to the public, Rollover 1981 is a movie that will engage the finance enthusiast, especially hard money advocates. It portraits an finance executive who, again, discloses a deal with the Saudis for them to turn all their dollars to gold without the market noticing it. Notice that the dollar was at its weakest, and the US was immerse in an estanflationary spiral until P. Volcker took over and raised interest rates precisely in 1981. It is remarkable that the facts occurring in this movie apply even more today than in 1981. From a very well written user comment on IMDB:

This is an unusual film: an adult thriller about the danger of fiscal manipulation. It's also unusual in that it remains relevant, perhaps even more so than when it was released; no less a person than renowned investor Warren Buffet has recently been warning of the dangers of having so much U.S. debt held by countries whose political agendas may not always require a stable or strong U.S. economy.

But is it a good film? With some reservations, I would argue that it is. Director Alan Pakula and cinematographer Giuseppe Rotunno have done a very good job of shadowing the action; rarely does anything take place in strong light, and then almost always when the action either involves the Saudis (the first meeting between the cartel and Lee Winters, played by Jane Fonda, for example) or serves their interests (e.g. the death of bank inspector Mr. Fewster). The locations, large and small, take on their own lives; the World Trade Center becomes a monolithic anthill, and there is a wonderfully ominous shot of the arrangement for Lee Winters's death being made by two men amid a crowd on a descending escalator which captures powerfully the essential isolation of the individual amid the crowds, and thus wordlessly encapsulates the underlying political concern of the film. The 720 degree pan just before the film's ambiguous coda is a marvel, one of those things which looks quite simple until one realizes the amount of work that must have gone into making it work smoothly. [...]

The screenplay handles the difficult task of dramatizing monetary transactions well; it is less effective when portraying the love scenes, especially the initial motivation for the central affair. But the climactic confrontation between Hume Cronyn and Kris Kristofferson is spot on; rarely does a character reveal moral bankruptcy as starkly as does Cronyn's, yet his words and his delivery both demonstrate his utter unawareness of the truth about himself. Indeed, the script generally manages to be both clear (albeit complex, requiring attention) and straightforward without becoming preachy or overly didactic.

 Two highly memorable films that I strongly recommend