Posts tagged ‘Reggie Middleton’
By Reggie Middleton
I’ve been very bearish on the EU and their banks and sovereign debt in particular, since Q! 2010 – way before most – reference Pan-European sovereign debt crisis. Yesterday morning if you were to Google the term EU recovery, you would see something like this in return…
- Autumn forecast 2013 – EU economy: Gradual recovery, external risks 2 days ago – Autumn forecast 2013 – EU economy: Gradual recovery, external risks.
- Europe Is Heading Toward Recovery, but Slowly – WSJ.com
- BBC News – CBI says staying in EU ‘overwhelmingly’ best for business
- European Economy Recovering Slowly – YouTube
- IB Times: Europe’s Economy Recovering: Three Positive Signs, Including …
- McKinsey – European growth and renewal: The path from crisis to recovery … Europe has very significant, and sometimes underappreciated, strengths on which to build a sustained recovery. As the world’s largest integrated economy,
- LA Times – Europe shows signs of economic recovery amid growth in Eurozone …
Well, somebody better tell Draghi, as per Bloomberg: ECB Cuts Key Rate to Record Low to Fight Deflation Threat
The European Central Bank cut its benchmark interest rate to a record low after a drop in inflation to the slowest pace in four years threatened its mission to keep prices stable.
Policy makers meeting in Frankfurt today reduced the main refinancing rate by a quarter point to 0.25 percent. The decision was predicted by three of 70 economists in a Bloomberg News survey. The ECB kept its deposit rate at zero and trimmed the marginal lending rate to 0.75 percent. ECB President Mario Draghi will hold a press conference at 2:30 p.m.
The ECB now has just one more quarter-point cut left before reaching zero, increasing the likelihood of unconventional tools such as quantitative easing or a negative deposit rate if prices slow further or the economic recovery stalls. Euro-area inflation is less than half the ECB’s target and unemployment is at the highest level since the currency bloc was formed in 1999.
“There comes a point where inflation is so weak, and coming in weaker than anticipated, that the case for loosening policy becomes too hard to resist,” said Richard Barwell, senior European economist at Royal Bank of Scotland Group Plc in London, who predicted the cut. “Bad unemployment numbers only make the case stronger.”
Does it seem like I’ve predicted the future hear once again as that Financial Nostradamus Dude???……………………………
If you are trading in this market you need to be listening to this guy !
The markets are been pushed up and there is nothing underneath to keep them there or at current values! The art of trading has all but vanished as we are now pit against algorithms and super computers and to survive you must be hedged at all times and well informed .This site (boombustblog.com) is a great start!
This bank [AIB], which is still trading in the US/Ireland and is still accepting deposits and making loans, appears to have some pretty fishy underpinnings.
So begins a an alarming if somewhat baffling blog post by Trading analyst Reggie Middleton posted on Monday night.
In which he claims AIB is falsifying it’s true value through the misuse of one word.
And may be the next bank to be “Cyprus’d”.
Vincent Lebraun explains:
The trouble with this high-level fraud is that it’s so “out-there” that people won’t be able to understand how serious this is.
In the charge document registered with the Irish Company Registration Office, it says that it is in respect of “all present and future liabilities whatsoever” of AIB.
And the charge itself is over “eligible securities”.
However, in AIB’s 2008 annual accounts and the files to the U.S. Securities & Exchange Commission, document 20F (page 223 – 2), it states that the charge was placed in favour of the Central Bank and Financial Services Authority of Ireland over all of AIB’s ‘right, title, interest and benefit present and future in and to certain segregated securities.’
Using the description ‘certain segregated securities’ is completely different to the description all ‘eligible securities.’ This is fraud of the highest order, and it’s so simple (yet so complicated) that they were hoping no-one would notice.
And we don’t have to take this guy’s word for it: he has both documents posted on his site (although he initially posted an Anglo document but has since rectified it and posted the AIB one)…
You have been warned get you money out to-day!
- Are You About To Get Cyprus’d in Ireland? When A Single Word’s Worth Billions Of Euros (safehaven.com)
- ZeroHedge: What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors? (silveristhenew.com)
- One Of Ireland’s Biggest Banks Busted Fudging The Books? Nah! Busted Concealing Debt? Nah! Busted.. Cyprus Was Just The Preamble (zerohedge.com)
- Irish unwind coming into play ? Pension ruling could hit Irish Government with a 300 million euro bill ? Budgets targets hard to hit as austerity looms for two more years ( and then two more years….. and then two more years ) (fredw-catharsisours.blogspot.com)
- What Should The US Do If One Of The Biggest Banks In Ireland Blatantly Defrauded US Investors? (zerohedge.com)
Trendline broken in French bonds ,today again Italy coming in but France is still moving out… hardly surprising. Just as i said… and stocks i think will break out up, even if that seems contradictory.
Update: I wrote this this morning. Markets react really fast. Huge move in French yields today. See charts on Mish blog. The declining trend line broken now 10yr 3.47. 3.75 or even 4.00 in a matter of few days. 4.80 is where France starts to spiral out like Italy, Greece, etc… Now the ECB monetizes massively or its massive defaults. Time is running out. My 2 cent guess is EFSF won’t even have time to do anything significant before the ECB steps in massively…
picsay-1319726495The most important development is that the Eurocalypse is in full panic mode and Italy blowing up. The inferno machine is now running full speed and there is little way back for it to now. When Italian bonds yields rise 70bp a day, roughly getting hit 4% in price, worse than stock indexes, its game over. VAR is too high, all traders, portfolio managers MUST exit, ECB is the only real bid in size (for how long ?); and sooner or later Italy has to show the white flag and ask for a bailout
- Stocks Making Risky Bet on Massive ECB Money Printing (blogs.wsj.com)
- Italy bond yield rises back above 7% despite ECB (marketwatch.com)
- ECB pushes back euro zone selloff (theglobeandmail.com)
- Sir Mervyn King: ECB is right not to bail out eurozone (telegraph.co.uk)
- From Mish: Sovereign Debt Yields and Spreads Soar Everywhere: Belgium, France, Italy, Spain, Ireland; Major Problem List is Every Country but Germany; Belgium Spread Inverts Significantly (jhaines6.wordpress.com)
Jesus Reggie this is just what the doctor ordered for my trading senarios .This only goes to show that you must be hedged at all times when trading!
Chancellor Angela Merkel’s government is preparing plans to shore up German banks in the event that Greece fails to meet the terms of its aid package and defaults, three coalition officials said.
The emergency plan involves measures to help banks and insurers that face a possible 50 percent loss on their Greek bonds if the next tranche of Greece’s bailout is withheld, said the people, who spoke on condition of anonymity because the deliberations are being held in private. The successor to the German government’s bank-rescue fund introduced in 2008 might be enrolled to help recapitalize the banks, one of the people said.
The existence of a “Plan B” underscores German concerns that Greece’s failure to stick to budget-cutting targets threatens European efforts to tame the debt crisis rattling the euro. German lawmakers stepped up their criticism of Greece this week, threatening to withhold aid unless it meets the terms of its austerity package, after an international mission to Athens suspended its report on the country’s progress.
Greece is “on a knife’s edge,” German Finance Minister Wolfgang Schaeuble told lawmakers at a closed-door meeting in Berlin on Sept. 7, a report in parliament’s bulletin showed yesterday. If the government can’t meet the aid terms, “it’s up to Greece to figure out how to get financing without the euro zone’s help,” he later said in a speech to parliament.
- As Greece Denies, Germany Begins Greek Default Preparations (zerohedge.com)
- Will the EU jettison Greece? (business.financialpost.com)
- Germany’s Schaeuble: Current Situation In Greece Is Serious (forexlive.com)
- Reuters:Τα πισωγυρίσματα και οι παλινωδίες της Ελλάδας,πυροδοτούν σενάρια εξόδου από το €. (oxtapus.wordpress.com)
- European Markets Shaken on Greek Woes, German Internal Votes (online.wsj.com)
There has been a lot of noise in both the alternative and the mainstream financial press regarding potential risk to the ECB regarding its exposure at roughly 48 to 72 cents on the dollar to sovereign debt purchases through leverage, and at par at that. This concern is quite well founded, if not just over a year or so too late. In January, I penned The ECB Loads Up On Increasingly Devalued Portuguese Bonds, Ensuring That They Will Get Hit Hard When Portugal Defaults. The title is self explanatory, but expound I shall. Before we get to the big boy media’s “year too late” take, let’s do a deep dive into how thoroughly we at BoomBustBlog foretold and warned of the insolvency of both European private banks and central banks, including the big Kahuna itself, the ECB! The kicker is that this risk was quite apparent well over a year ago. On April 27th, 2010 I penned the piece “How Greece Killed Its Own Banks!“. It went a little something like this:
Yes, you read that correctly! Greece killed its own banks. You see, many knew as far back as January (if not last year) that Greece would have a singificant problem floating its debt. As a safeguard, they had their banks purchase a large amount of their debt offerings which gave the perception of much stronger demand than what I believe was actually in the market. So, what happens when these relatively small banks gobble up all of this debt that is summarily downgraded 15 ways from Idaho.
Well, the answer is…. Insolvency! The gorging on quickly to be devalued debt was the absolutely last thing the Greek banks needed as they were suffering from a classic run on the bank due to deposits being pulled out at a record pace. So assuming the aforementioned drain on liquidity from a bank run (mitigated in part or in full by support from the ECB), imagine what happens when a very significant portion of your bond portfolio performs as follows (please note that these numbers were drawn before the bond market route of the 27th)…
The same hypothetical leveraged positions expressed as a percentage gain or loss…
Relevant subscription material for BoomBustBlog paying members:
- Greece Public Finances Projections
- Banks exposed to Central and Eastern Europe
- Greek Banking Fundamental Tear Sheet
Online Spreadsheets (professional and institutional subscribers only)
Greek Default Restructuring Scenario Analysis with Sustainable Debt/GDP Limits and Haircuts
Several months later I posted several follow-up pieces along the same vein:
A Comparison of Our Greek Bond Restructuring Analysis to that of Argentina Wednesday, May 26th, 2010
For our professional and institutional subscribers, the Ireland Default Restructuring Scenario Analysis with Sustainable Debt/GDP Limits and Haircuts are available online. All subscribers have access to the Irish Bank Strategy Note which adequately warned before Irish banks dropped 85% in value. The Ireland public finances projectionsis also available to all paying members.
To continue reading the full article and much more please follow link to source:
The Irish government spends millions every year on financial advisers I suggest they instead pay Reggie to advise then better still Reggie should be Finance Minster. I have been following his observations and conclusions for three years now and I only wish I had heard of him earlier. There is no substitute for the real facts and the truth!
Thank God there are people like this man around; otherwise the small investors would be history. Great article Reggie and Thank you .