EVERYTHING IS FIXED NOW, RIGHT?

                                         Europe In A Nutshell

For you grown-ups out there, this is like watching your kids get a free credit card from their grandparents; not a pretty sight. But not to worry, because everything is now fine in Spain because the smartest-guys-in-the-room have just thrown a check their way to the tune of a “1” with “11” zeroes behind it. Where this money comes from nobody has a clue.

But we are all smart enough to know by now that politicians solve a problem, not by actually solving anything, but by talking about it. Because you see, talking about it to them means it’s on their radar now, and not to worry, we are on it. Uh huh.

The Germans, natch, are expected to lend their AAA credit rating to this hair-brained scheme, but in all things like making sausage and passing out 100 billion Euros, the details are gonna get a bit sloppy. For one, nobody in Germany, except the Pols, are for this. Second, it ain’t gonna matter because on June 17^th, the Greeks say adios to the Euro. And third, as if we need another reason, every other deadbeat sovereign member of the PIIGS gang now wants the same deal as Spain.

“Hey, where’s our hundred billion with no strings attached?”

I swear, it’s enough to make you think the Pols are really in the biz of herding cats. A tough gig no?

                                         Politicians Take Note

Of course, with record spec short positions via the Crimex CME in EURUSD, it’s not really a surprise that we gapped up 100 big ones on the opening in Asia last night. Did you hear the big – WHEEEEW !! – whoosh out of Europe last night? But sadly, with all Ponzi schemes the half-life on this “solution” hasn’t even lasted 12 hours.

And gold? Firmly in control of the Central Planners and weakening as I write.

“But QE3 and QE4; c’mon man, money printing, ya know?”       

Yea, I will make sure and tell that to the prop desk over at JPM that is selling with both hands.”

And so, we find ourselves on countdown to next Tuesday, when we know for sure the Greeks are deadbeats, and the newly emboldened leftists tell Europe to go pound sand with their debt.

 Anybody want to make book on this?

Have a good day everyone.

-vegas

IS THIS TIME DIFFERENT?

                                 No, I’m Thinkin’ Bigger Issues

Except for the occasional rally to blister the shorts, EURUSD looks set to go lower; much lower. At the same time, though, we got record short positions over at the Crimex CME in spec Euro positions. Will the universe let all these shorts be right?

Markets face this reality all the time; take gold bugs for instance. I know people who always buy the top in gold, swear they are never going to sell because the world is a mess, etc. and then sell the bottom days/weeks/months later.

What have we just seen in gold? Does 2 to 3 day rally [$50 - $75] that gets public long [again] meet $25 - $35 decline in 40 – 60 minutes a few days later sound familiar? Uhhhhh, yea.

Anyone that knows Forex history will tell you that one-way bets have a way of not being so one-way. Now, that doesn’t mean that can’t stay one-way for extended periods; what it means is that when it ends it will be ugly with a capital U. We had a 2000 pip rally at the end of 2008 [in 10 days] in Euro from about 1.26 to 1.46. The carry trades are notorious for disaster; go ask Mrs. Watanabe about GBPJPY that was a one-way street for years and then gave it all back [and more] within 3 months.

What gives the shorts in the Euro a better than even chance of being a long way from being over on the down side are the politicians; ever seen a bigger bunch of worthless blow bags?

Rumors and leaks are pieces of credibility that have to be saved, not spent so your mistress can get a new Mercedes Benz. As long as they blow smoke, and remain in denial, the Euro will not have any rally legs to take it anywhere.

Yes Virginia, this time MAY be different.

Have a good day everyone.

-vegas

BUYERS ON STRIKE

                           That’s Right; We Ain’t Buyin’ Nuttin’

I know it’s hard, but imagine this for a moment; Greece is totally out of money! They got about € 1.98 in the bank [if it’s still open]. I mean, who could have seen this coming?

Tomorrow sees a Greek bond auction, and if this somehow gets undersubscribed and they can’t raise the necessary scratch to pay the bills, I’m sure all the public sector union thugs employees not getting paid, the 40 year old philosophy students not getting their University tuition, and the pensioners who see their monthly checks slashed,  won’t be a problem. Peace and love in Syntagma Square.

So, the only thing left to do in Europe is sell gold. Even the “Lemmings in Asia” have caught on to the scam game. Yes, Mrs. Watanabe and all her pals, who have been accumulating gold from the 1800’s, 1700’s, and 1600’s, are now bailing in the mid 1500’s. As predictable as they were going up, they don’t disappoint on the way down either; only, on the way down it happens a lot faster.

Not to be outdone, that stellar Wall Street firm Morgan Stanley is telling muppets clients today that gold is still a buy and that the future looks bright for the “barbarous relic”. Seems their prop desk has more proprietary selling to do.

We’re due here, in just about everything financial and especially gold, for a smart 2 or 3 day rally that takes prices back up some. Whenever it finally does happen, look for the rally to start sometime after the Crimex Comex closes for the day. After all, the dealers and Central Planners have to shove the rock back up the hill, in the least volatile time of the trading day, to get everybody else to buy it in “prime time”. Rinse and repeat.

Meanwhile, at JPM …….

                                             Ina Drew Is Gone

Somebody had to fall on the”It’s-my-fault-the-firm-lost-2-large-on-the-trade” sword; making a paltry $15 million per year I’m thinkin’ soup kitchen isn’t in her future. Perhaps there is a good job in Chalky Soetero’s administration somewhere; Treasury Department would be appropriate.

Have a good day everyone.

-vegas