weekend commentary - the Black Swan is the new American National Bird + 'New Normal'
from
(snip)"Mohammed El-Erian is given credit for the phrase 'The New Normal' to mean an altered state of perceived instability within the normalcy realm, as in crisis being called normal, like endless crisis. As buddy Jim Mess in Europe says, just like trying to redefine what debt default is, it sounds like high octane prevarication. El-Erian is considered one of the good guys. He managed to slip away from Harvard University without much smear, where he served on the management team of the giant multi-$billion endowment fund. If truth be told, Harvard hatched the Enron monster from its Business School as a project, funded by Citigroup, where JPMorgan created all the off-shore companies to hide their dealings. Building #7 in Lower Manhattan contained the records until it fell from structural sympathy. Harvard successfully made money all the way on the Enron runup, but also successfully shorted Enron all the way down. So El-Erian is hardly squeaky clean. He does give a good interview though, does not deal much in varnished truths, and is an avid NYMets baseball fan. At PIMCO, he worked on the team to direct the biggest bond fund in the world to turn its back on the entire USTreasury Bond complex. In fact, their Total Return Fund, its flagship bond fund, is net short on USTreasurys as a group. That means they own a raft of Credit Default Swaps for USGovt debt default and an assortment of other vehicles like the TNX and TYX that track the 10-year and 30-year bond yield. They recognize an asset bubble when they see one, and even invest in Gold.
The other person relevant to the article title is Nassim Taleb, who coined the term Black Swan. Generally it refers to the extreme oddity that passes through view, shows up on the radar, the extreme warning signal being dire, but is largely ignored by the masses, regarded as the exception or outlier event. THE BLACK SWAN HAS BECOME THE NATIONAL BIRD!! When a few black swans appear, the alert analysts pay heed and express their warnings. When an armada of black swans appear, the message is clear. A systemic failure is in progress, and the important foundations are crumbling. In 2009 and 2010, it was clear that numerous black swans were sighted and identified. In 2011, something highly unusual and extraordinary has occurred. The black swans can be organized into groups. They are numerous within each important economic and financial camp. The Armada of Black Swans, well organized into regiments, has become dominant enough to be considered the New Normal. During the global financial crisis (which has earned a widely used GFC acronym), tragically the state of crisis has become an engrained latticework on the reality mosaic. A quick review at a high level should cause alarm, except for the gradual pathogenesis that dictates the pace of systemic failure in progress. If the list below were presented as a Wall Street Journal forecast in 2006, the author would have been subjected to laughter, derision, and mockery. Yet here and now, the organized groups of black swans are visible everywhere one looks. Worse, they are carrying nuclear slingshots, and defecate highly toxic green blobs into the liquidity streams that we have grown so dependent upon.(snip)
(snip)"ARMADA OF BLACK SWANS
Consider the following black swan specimens, each of which is astounding, each alarming, each serving as one more added element to the ruined situation. The swan organization is admittedly rough, but the regiments are put in sensible order. Any small handful of these signals would qualify as forewarning a profound crisis. Not anymore, since crisis is the new normal. Not anymore, since black swans adorn the entire landscape. A healthy white swan gradually suffers from toxic exposure, quickly to turn black from a putrefaction process. Apologies for overlooking at least a dozen other important other black swans, as time and space did not permit the exhaustive catalogue process. Emphasis was given to the United States ponds and its migratory bird population.
USTREASURY BOND SWANS
USGovt debt ceiling standoff, with actual violations
Over 75% of USTreasurys auctioned bought by the USFed in debt monetization
Turnaround from primary bond dealers to POMO repurchase by the USFed is 3 weeks
Foreign banks form 12 of 21 primary bond dealers
PIMCO owns no USTreasury Bonds, even short
Global boycott of USTBond by creditors, some net sellers
Foreign creditors owns the majority of USGovt debt
A fixture of $1.5 trillion annual USGovt deficits
Greenspan and David Stockman warn of USGovt debt catastrophe
USMint officers admit Fort Knox has been shut down for 30 years, as in zero gold
USFED SWANS
QE permanence, otherwise called QE to Infinity, worked into standard policy
Bank of England urges more bond buying
Cost of money 0% for two full years, implication being destroyed capital
Chairman regards monetary hyper-inflation as being zero cost
Ron Paul pushes for a USFed audit, an end run to pay down USGovt debt
USFed owns more USTBonds than any other creditor
Competing Currency War has Euro weakness mean USDollar as all circle the toilet
USGOVT SWANS
USGovt could shut all operations but still be have a budget deficit
USGovt could confiscate all income but still have a budget deficit
USGovt must cover AIG payouts on Greek Govt debt default from CDSwaps
US Postal Service stops all payments into their pension system
New York Fed refuses to disclose the destination of $6.6 billion stolen from Iraqi Reconstruction Fund
Federal Worker Pension Funds and G-Funds confiscated (called borrowed)
USMint runs out of gold & silver metal to make coins
Endless war accepted as sacred, whose costs are crippling
Council on Foreign Relations enables a foreign nation to control US foreign policy
Breaches to USGovt communications via WikiLeaks
COMEX SWANS
GATA Gold Rush 2011 in London Savoy Hotel on August 4th will feature the COMEX whisteblower Andrew Maguire
Silver futures contracts settled almost exclusively in cash, often with 25% vig bonus
Gold & silver futures contracts often settled with GLD & SLV shares
Umpteen margin increases for gold & silver futures contracts, but reductions in USTBond futures contract margin requirements
Brent versus West Texas crude oil price has a $20 spread
Every time Bernanke assures US financial markets, gold & silver rise in price
Elimination of Over The Counter gold & silver contracts due in mid-July
BANK SWANS
Chronically insolvent USFed and EuroCB, balance sheets ruined
FASB accounting rules permit banks to grade their own test exams
Stress Test for banks had almost no stress, a sham
Dependence by Wall Street banks on naked shorting USTBonds and narco funds, the former called Failures to Deliver, the latter recognized by the United Nations
Shadow housing inventory held by banks over one million homes
Wall Street firms in court on the defensive, JPMorgan foreclosed soldiers
Wall Street firms banned in Europe on bond securitization and issuance
Strategic mortgage defaults by homeowners on the fast rise
Gold holdings by tyrant Arab rulers targeted by New York & London banks
War over Libya grabbed $90 billion in Qaddafi money by New York & London
PIGS sovereign debt default in Europe to have impact ripples that reach US banks
Standard & Poors reminds the players what constitutes a debt default
No liquidation of big US or London or European banks since Lehman Brothers
Much of dimwitted US population believes the propaganda that Gold is a bubble
USECONOMY SWANS
USEconomic indexes fall off the cliff, see Philly Fed, Empire State, ISMs
Rampant systemic insolvency in banks, homes, federal government
US housing resumes its powerful bear market
US land title system in the disintegration process, see MERS on mortgage titles
Unemployment at 20% across the Western world, economic misery index hit 30%
USGovt economic stimulus never contains stimulus
Main non-military innovation in the United States is bond fraud
Shrinking US trucker industry from $4 gasoline and diesel
China begins to export price inflation to the United States
Killing state worker union pensions as part of the state budget shortfalls
Gulf of Mexico off limits for oil drilling
1 in 7 Americans is on Food Stamps, whose debit cards are good JPMorgan business
media blackout on the Fort Calhoun near nuclear plant meltdown in Nebraska
FOOD & WEATHER SWANS
Food price inflation is staggering but denied
Floods across Midwest & Plains states to interrupt with planting & harvest
Australian floods have interfered with coal industry and agriculture
Fukushima and Northwest US infant mortality, with vulnerable milk next
Big volcanoes like in Chile and Iceland disrupt weather and air travel
EUROPEAN SWANS
German bankers at war with Euro Central Bank
Germans abandon the EuroCB, leaving it to Goldman Sachs, see Draghi
Spanish banking system has yet to write down squat on housing credit assets
Portugal, Italy, and Spain sure to follow Greece into a debt default
Belgium has had no government for a full year
Ireland prints more money per capita than the USFed
US & NATO to part ways
CHINESE SWANS
G-8 Meeting is pushed aside, as the Anglos deal with broad insolvency
G-20 Meeting takes center stage in a power play, led by China and the BRICs
China buys discounted PIGS sovereign debt, to redeem later in central bank gold
Chinese FX reserves exceed $3 trillion held in sovereign wealth funds
China owns most world major ports, as part of a strangulation process
China conducts the great Idaho experiment, toward re-industrialization of America
HIDDEN SWANS
Swiss faces hundreds of $million lawsuits, for refusal to deliver Allocated gold
Saudi Arabia cuts new deal for Persian Gulf security protection, see Petro-Dollar
Citigroup has high hidden exposure to Greek Govt debt default
Chinese vengeance over reneged USGovt gold & silver lease, as part of the Most Favored Nation granted status, has motivated its extreme pursuit of precious metals
Containers hold $300 to $500 billion in EuroNotes at Greek port warehouses
Internet strides light years ahead of USGovt regulatory hounds at syndicate offices
Chemtrails, storm steering, lingering droughts, fallout falling, haarps a playing (snip)