Ireland ‘likely’ to leave Euro

The euro zone region’s inability to fund future bailouts will probably force some of the 16 euro nations, including Ireland, to abandon the currency within five years, the head of the world’s largest bond management firm has warned.


Mohamed A El-Erian, chief executive of investment management firm Pacific Investment Management Company (Pimco), told CNBC that Spain and Portugal are likely follow Ireland in drawing on the European Union’s bailout fund. Mr El-Erian, whose company has more than $1 trillion under management said the EU has not taken control of the crisis.


Read more at irishtimes.com 

Gold: the ultimate Credit Default Swap

From SeekingAlpha,   December 05, 2010

 by Jack Sparrow

Gold is the ultimate Credit Default Swap. It’s meltdown insurance taken out against Federal Reserve Inc. and the global financial system at large. And the best part is, with this CDS you never have to worry about your counterparty.

That simple observation is a worthy retort to all those who yammer on about how “gold has no intrinsic value”… how gold is worthless because “it offers no yield, no return on investment” and so on.

When was the last time you heard someone complaining about the fire insurance policy on their house — the fact that it “offered no yield” etcetera?

When it comes to insurance, yield isn’t the point…

There is a speculative component too, of course. You can make a ton of money buying fire insurance on houses you don’t own. John Paulson taught us that, via his multi-billion-dollar CDS score when the housing bubble turned to bust.

The CDS analogy also applies in that you don’t need armageddon to turn a profit. A company (or a country for that matter) doesn’t need to implode for long CDS to pay off.

All we need to see is a rise in the perceived risk of default — an increase in the statistical probability, however small, that the worst-case scenario could occur.

And this of course explains why the financial establishment hates gold. Ben Bernanke is the CEO of Federal Reserve Inc., and gold is a CDS bet that the organization is flailing and management has lost control.

Let’s keep exploring this parallel. Apart from the recent cycle, when was the last big heyday for gold? The mid to late 1970s — no coincidence the Fed had lost control then too.

(By the way, did you know there was a massive housing bubble in the 1970s, on a scale to rival the latest one?)

Those who pooh-pooh gold do so on the basis of knee-jerk historical recency bias. They point to the extended doldrums of the post-1980 period as evidence of how worthless the yellow metal is.

Reaching into their memory banks and bringing forth the good times of the Reagan-Bush-Clinton years, they mistake a roughly 20-year historical time window for a permanent state of affairs.

Yet once again, the CDS analogy — gold as a bet against Federal Reserve Inc. — sheds light on this mistake.

Not to put too fine a point on it, Paul Volcker was “the man.” He helped the Fed get its shit together in the late 70s / early 80s. His ability and willingness to do that laid the groundwork for the long period of increasingly leveraged prosperity that followed.

So it’s no wonder that gold went into dormancy after “Tall Paul” broke the back of inflation. Through the actions of an extraordinary leader, the financial system cleansed itself of excess and facilitated a path to healing — exactly the type of environment in which a CDS “meltdown” bet would peak out and decline.

But that was then and this is now. Today we’re on the far side of the leverage and debt supercycle, with unaddressed problems mounting and no competent leadership in sight.

Question: You see any “cleansing of excess” going on in 2010? I don’t. I see a bunch of theory-drunk gamblers (disguised as academics) hooked on double-down martingale strategy.

“If this desperation bet doesn’t work, we’ll just up the size of the next one…”

As a side note, it’s instructive to recall that Volcker was exactly what a Fed Chairman (and perhaps a CEO) should be. Gruff, hard-nosed, determined. A loner type, not a flesh-pressing people-pleaser. Someone who could stoically sit back and take it when outraged homebuilders, crushed by interest rate hikes, started sending 2×4 planks to Volcker’s office with hate notes attached. Someone with the testicular fortitude to do what needed to be done in the face of deafening public outcry.

Volcker, in other words, stands in direct and nearly absolute contrast to that lily-livered, mealy-mouthed, glad-handing cheerleader pantywaist, Alan Greenspan.

When “the Maestro” dared to utter the words “irrational exuberance” in the mid-1990s, the political fallout from a swooning stock market scared him so badly he might as well have had his spine surgically removed the very next day. Mr. “I just want to be loved” never again challenged the bullish orthodoxy after that. (Or at least, not until he retired and started craving missed attention…)

And now we have Ben Bernanke, a cowed academic after Greenspan’s own heart. We recently saw the full extent to which “the Ben Bernank” would go to please all manner of masters, and gold surged on the reveal.

The Fed’s solution — MOAR STIMULUS! MOAR PRINT! MOAR! — would be hilarious were it not so tragic. (Come to think of it, it’s darkly hilarious anyway.)

Thus gold, the ultimate CDS, remains a powerful insurance bet that Federal Reserve Inc., under Keystone Cops management, has screwed things up badly and is in danger of making things worse.

And of course, if you like gold, it’s hard not to like gold stocks…

Disclosure: As active traders, authors may have positions long or short in any securities mentioned. Full disclaimer can be found here.

About the author: Mercenary Trader

Mercenary Trader (www.mercenarytrader.com) was created by traders, for traders. We are aggressive swing traders who routinely combine fundamentals, technicals and sentiment with deep awareness of global macro and rigorous analysis of individual equities. See all of our content, including free...More

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[WTF] Here it comes the SS: Homeland Security Compiling TSA Enemies List

From the New American
By Alex Newman

The Department of Homeland Security is gathering names and information about anti-Transportation Security Administration activists, members of the media, and other supposed troublemakers for investigation and possible tracking, according to an internal DHS memo cited by security expert and Northeast Intelligence Network Director Douglas Hagmann. Hagmann’s report, first published last week on the NIN website and in Canada Free Press, is causing widespread condemnation and ridicule of the U.S. regime across the internet. According to the article, Hagmann was contacted by a source within the DHS following publication of a previous article on TSA abuses entitled “Gate Rape of America.”

The secret memo was written “in response to the growing public backlash against enhanced TSA security screening procedures and the agents conducting the screening process,” explained the DHS document’s introductory paragraph. It was issued in the form of an “administrative directive” after high-level meetings between American “security” bosses like Janet Napolitano and TSA overlord John Pistole. And Obama apparently approved.

The memo reportedly labels opponents of the TSA’s heavy-handed groping, naked-body scanners, and other procedures as “domestic extremists.” Federal bureaucrats are actually instructed to identify and electronically report individuals falling under the “extremist” classification — including “any person, group or alternative media source” opposed to the TSA’s Fourth Amendment violations — to the Homeland Environment Threat Analysis Division, the “Extremism and Radicalization” branch of the Office of Intelligence & Analysis section of the DHS. The dragnet also includes anyone who “supports and/or elicits support” for people causing “disruptions.”

“It would appear that the Department of Homeland Security is not only prepared to enforce the enhanced security procedures at airports, but is involved in gathering intelligence about those who don’t. They’re making a list and most certainly will be checking it twice,” wrote Hagmann in the article, entitled “DHS & TSA: Making a list, checking it twice.”

Read Entire Article

Geoengineering: Climate Ghouls’ ‘Plan B’

From BlackListedNews (my emphasis):



The UN Climate talks in Cancun are now focusing on geoengineering, using it as a tool to extort a binding UN treaty to reduce phony global warming.  The AP reported today that “we may need geoengineering as a ‘Plan B,’ if nations fail to forge agreement on a binding treaty to rein in greenhouse gases”, per a British House of Commons report.


Geoengineering and contrived global warming lies are facets of Agenda 21, the overarching blueprint for control and depopulation.  The article states that geoengineering can cause rain precipitation and other weather changes.
The AP article revealed that the primary forces behind geoengineering are the UN, the US and the UK.  The US and the UK governments urged the UN Intergovernmental Panel on Climate Change (IPCC) to study geoengineering, with the US in the research forefront.  The article says that “specialists regard the stratospheric sulfates proposal as among the most feasible”- this means chemtrails.   But instead of sulfates, patents and evidence indicate that aluminum and barium are currently being sprayed.  The US National Oceanic and Atmospheric Administration (NOAA) will do the unreliable computer modeling tests for the US research.  Watch this video to understand that this is a depopulation program and this NOAA scientist advocates “doing whatever we can to reduce population”.


The new willingness of the UN to consider geoengineering comes just weeks after the UN’s Biodiversity conference in Japan wherein they imposed a moratorium on it until the implications could be fully studied. The UN used the ‘moratorium’ for support to gain global control over geoengineering and weather.  Notably, the US did not sign the UN Biodiversity Convention (another word for ‘treaty’) in favor of the moratorium and UN control.


The UK government hosts the Hadley Center at East Anglia University, the home-base of the UN IPCC and is known for the ‘Climategate’ scandal and manipulated science.  Margaret Thatcher established Hadley Center to usher in globalism and to weaken US power.  The UN IPCC will pay off hundreds of scientists to study geoengineering for the IPCC’s next assessment report.   The UK supports UN control over geoengineering.


Sylvia Ribeiro of ETC was responsible for the UN short-lived moratorium promise on geoengineering at the Biodiversity Convention.  She said that the UN must control geoengineering.  Her 501(c)3 organization, ETC, has been funded by the likes of the Ford Foundation (known for supporting depopulation) and the HKH Foundation that funds other extreme environmental groups (Tides Foundation, NRDC, Union of Concerned Scientists, etc) with ties to the UN.
Foundations and depopulation policy makers are deeply intertwined; the UN IPCC sets public policy directly and indirectly.  An example of this is UN IPCC Chairman Rajendra Pachauri who is married to Saroj Pachauri, a director of the Rockefeller founded Population Council and she also worked for the Ford Foundation.  While Rajendra may be concerned about the effects of geoengineering, his wife works to limit population.


The article reports that scientists say warming is being caused by greenhouse gases emitted by industry, vehicles and agriculture.  The truth is that only a fraction of 1% of carbon emissions comes from these sources and agriculture, industry and transportation are targets for control.  Food production is a depopulation focal point and changes in precipitation affects food.
Ocean acidification is another global warming lie.  Geoengineering iron seeding or fertilization in the oceans can produce toxic algae blooms and would have little effect on carbon reduction.


Britain’s national science academy said that the greatest challenges to geoengineering may not be science and engineering, but social ethical, legal and political issues.  It is a problem for the depopulation ghouls that many people are aware of the potential effects of chemtrails and are angry about being sprayed like bugs.