Thursday, June 2, 2011

Downgrade Thursday- Moody's Downgrades Greece Again, In Hall Of Shame; Thousands Protest; PIIGS CDS Spreads Explode; TEPCO One Step Closer To Default As S&P Cuts, Shares Tank; iPad Madness: Boy Sells Kidney To Buy An iPad2; Fukushima Updates

Updates
Update 1: Factory orders drop 1.2%, while inventories climb 1.3%. Another "green shoot" in Ben's hat.

Update 2: Large clouds of steam/smoke seen rising from reactor 4, EneNews.

Main Article 
If the past three days of horrific economic data was not enough to convince you that the US and by extension, the entire global economy is in the throes of a very real depression, then perhaps the mood barometer of the US consumer (aka Consumer Confidence) should - as so aptly highlighted on ZeroHedge, consumer confidence is now lower than at any other point in time including tragedies such as the 1987 market crash, the dot.com bubble, 9/11, hurricane Katrina and the collapse of Lehman Brothers. That alone speaks bound volumes of information as to where the economy stands after 4 years of "stimulus" worth $5 Trillion and it's obvious to the savvy readers here where all the money is going (hint: if you're one of the bottom 99% of the population, it's not in your pocket). FWIW, insider stock sales this week doubled from the previous week, totaling $330 million in stock sales. We wonder why they have been heading for the exits since the manipulated rigged casino the "stock markets" returned to "pre-recession" levels, if they still expect tons of growth in the future. Something stinks, and it reminds of us the housing market in 2006.

In Europe, the problems are perhaps even worse. While you were sleeping, the gangrene called government debt, continued to undermine the social stability of Greece, Portugal, Ireland and Spain. One quick glance at the near record CDS spreads tells part of the story - investors who were fooled once won't be fooled again - and they expect an imminent default restructuring of Greek debt any day now. How's that 16% ten year yield working out for you? Which begs the question - why has it taken the ratings agencies so long to figure this out? Moody's downgrades Greece again just above "default" and the outlook is negative. (Better yet, why has it taken them so long to figure out the banks are ripe for big downgrades?) Guess what comes next? This piece from the WSJ explains the 3 options Greece has remaining, for all but 3 weeks; all of them leave Greece in the same position as Argentina was in a few years back. In the meantime, lot's of pots and pans are getting banged in the streets by the estimated 50,000 protesters taking to the streets on an almost daily basis. Social unrest is one symptom of a major societal problem and coming to a Main Street near you.

Considering how Iceland stuck it to the bankers and is now recovering better than ever, we think a default (or whatever euphemism you so choose) will be in their best interest long term. A fresh start for the people and a  fresh currency which can actually compete, will be the result. Who will get stuck holding the short end of the stick? The banksters bankers. I'm sure your heart will bleed for them.

Certainly, this issue is highly complex and can't be solved in a single leap, but at this point in time, what could be worse? How about selling off your 2000 year old heritage to some bankers? Greek politicians are seriously considering that option and the Chinese are happy to buy.

Of course, not everything is about money. Or is it? As the situation in Japan spirals out of control and reaches full nuclear "Chernobyl on Steroids" and 40% of all Fukushima hospital patients are showing internal radiation poisoning and radioactive green tea is showing up 40 miles Southwest of Tokyo(!) TEPCO shares plummet on an S&P analysis of the situation. Too late. Any wonder why now some honest people are coming forth saying "Tokyo will be lost to radiation?" The cat is out of the bag. If the worlds 3rd largest economy becomes uninhabitable, is this bullish for the stock markets?

Finally, in other radioactive news, we learn that a boy in China sold his kidney so he could buy an iPad2. Of course, we wonder how he will feel when the iPad3 comes out next month. Say, what's a pair of testicles worth nowadays? How about an iPad3.

6 comments:

  1. Thanks for keeping the Fukushima news coming. If it weren't for you, I'd be missing about half of it.

    Google translate sure had a hard time with that 40% story though, huh? I'd like to see a follow-up on that one, if a story appears with more english-readable info in it. Not holding my breath though, since it seems the western MSM doesn't even want to do blurb pieces on this stuff anymore.

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  2. Umdesch4- There is a nearly full media blackout on Fukushima. Remember, consumer confidence is not boosted with bad news from Japan. We need to hear about Snookie's car accident and Arnold's love children to keep the money flowing and iPads selling.

    I will have some more Fukushima news shortly.

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  3. In addition to the smoke, at around 1:52, and again at about 2:09 in that video you can see bright flashes in the left-hand feed. I wonder what, if anything, those are?

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  4. The story about the boy who sold his organs for a ipad is really what our society has become. So worried about objects to own when the hole world deescends into chaos. thank you very much. MPP5 in Sweden BL

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  5. Hmm... 26% ten year yield for Greece? Where did that figure come from? When I check it's more lke 16%, which ofc is still very high.

    Thanks for a great blog!

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  6. @Umdesch4- Yes, a contact of mine told me they are the work lights but there has been a ton of unusual activity near reactor 4. Notice the EQ last night and subsequent fire in SFP4. Someone also pointed out to me that now the entire wall of 4 has collapsed.

    @Mpp5- Yes, this is the way the world is going. Snowball effect.

    @Tommy- Thank you for that and noted. The 26% yield was off the 2 year bond - sorry for that typo. The 10yr is indeed yielding 16% not 26%.

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