Mish's Global Economic Trend Analysis |
- Le Voyage de Fubar - Elephants Take Flight
- EFSF Bail-Out Fund Buys Its Own Debt Because Not Enough Others Will
- Trim Tabs CEO on Entitlements, Government Spending, Stock Buybacks, and What's Propping Up Equity Markets
| Le Voyage de Fubar - Elephants Take Flight Posted: 12 Nov 2011 10:36 PM PST Sunday funnies returns to celebrate the resignations of Greek prime minister George Papandreou and Italian prime minister Silvio Berlusconi. We bid them "fond" farewell on their long overdue farewell tour.  German Chancellor Angela Merkel and French President Nicolas Sarkozy also have farewell tours scheduled (they just don't know it yet). The image, sent by a reader who did not wish any credit says "I re-worked a 1932 French children book cover Voyage de Babar. Hope you like it." The reworked image initially only contained Merkel and Sarkozy. I suggested adding Papandreou and Berlusconi and the words "next up" and there you have it. The true original is in public domain, from http://en.wikipedia.org/wiki/File:Babar2.jpg. In the spirit of Sunday Funnies I invite you to read a true comic sent in by the father of an 11 years old posted earlier. In case you missed it please see European Crisis Through Eyes of 11-Year Old in Comic he Created Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. 
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| EFSF Bail-Out Fund Buys Its Own Debt Because Not Enough Others Will Posted: 12 Nov 2011 03:48 PM PST To raise "bailout" money the EFSF sells bonds. In its first auction after the new Merkozy agreement, not enough investors wanted the garbage and the fund ended up buying some of its own bonds. The Telegraph reports Eurozone bail-out fund has to resort to buying its own debt The European Financial Stability Facility (EFSF) last week announced it had successfully sold a €3bn 10-year bond in support of Ireland.Bizarre Setup The EFSF raises money by selling bonds that few investors want. So it buys its own debt effectively raising no cash. Is this supposed to work? Given there are still no terms on the EFSF debt, agreements on leverage, amount of guarantees, etc., the amazing thing is not that the EFSF had to buy some of its debt, but rather anyone else was interested at all. This helps explain why the IMF went on a tour of Russia and China begging them to buy the garbage. No one else wants it, and the EFSF suspected as much in advance. For details on the IMF dog-and-pony show in Asia, please see World has Major Funding Gap; IMF Begs Russia and China for Money; Italy and Greece Demand Deposits Collapse; Run on Greek Banks? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. 
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| Posted: 12 Nov 2011 09:32 AM PST TrimTabs President & CEO Charles Biderman discusses how global financial markets are suffering from years of borrowing to pay entitlements to citizens, stock buybacks by corporations, and other topics in a short 2:16 video. Biderman had predicted a collapse in equity markets but says stochttp://beta.blogger.com/img/blank.gifk buybacks by corporations have, for now, prevented that collapse. Ending Quote "In 2009 with interest rates dirt cheap companies have sold around $3 trillion in bonds and about $800 billion in new shares. Companies are currently the only buyers of stocks as individuals remain net sellers. $2 billion a day of company buying can take the market higher. That is until companies stop buying and start selling lots of new shares." Here is a link if the video does not play: Biderman's Daily Rant for 11/3/2011 For every buyer there is a seller and vice versa. Moreover, stocks can go up or down whether corporations are buying or selling. However, it is important to note that the frequently touted corporate "cash on the sidelines" is for the most part debt. A handful of tech companies with huge piles of cash and little debt is the exception, not the rule. If companies squander their "cash" on buybacks, they will once again be back in a situation of high debt and no cash when the market bottoms, because buybacks or not, the market is overvalued and eventually will get to where it's going. BTW, here is something I came across the other day: A link to all the videos I have used in this blog. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. 
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