US Dollar Undermined; Spaniards Whisper Iceland; Europe Rejects German Overtures

May 9, 2012

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“Democracy passes into despotism.” ~ Plato

“Despotism is a form of government in which a single entity rules with absolute power.” ~ Wikipedia

“Soros’ special skill is uncovering asymmetric bets” ~ Sebastian Mallabay – the correct forecast is only half the battle, at best.

“Cash is as risky as any asset you can own over time” ~ Warren Buffet ~ zerohedgecash, or liquidity in general, possesses the oft de-emphasized benefit of optionality, or the ability to purchase attractive assets amid forced liquidations

Freedom:

“We have problems . . . The federal government is preparing for civil uprising,” amid a dollar collapse, cites anonymous source ~ ETF Daily News ~ the DHS, and other agencies, probably have contingency plans for all manner likely and unlikely of scenarios, none of which likely involve more freedom as a solution.

Iran sanctions undermines US dollar as Oil trades in Yuan, Rupees, and Junk ~ 24/7 Wall Streetguessing this was not anticipated

US:

Americans’ View of Local Government More Favorably than Washington by approx 2:1 ~ Pew Research Center

Consumer Credit Jumps 7.75% on student and car loans, fastest rate since late 2001~Inc Magazine #operationnewbubble

Marc Lasry, Avenue Capital Group likes the debt of Hovnanian, a property developer, which trades at 60 cents on the dollar and provides an all in yield of 13% $HOV ~ Milken Conference

The “sub-priming” of commodities – structured finance deals and commodities as collateral makes banks vulnerable ~ FT Alphaville

  • New structured commodities products hint at high leverage, suggests a sharp drop would cause margin calls, amplify any downturn

World:

Ken Rogoff sees Hollande win as a rejection of Germany’s influence in the Eurozone, not of austerity ~ CNN Money

Top Tweet in Spain “Do as Iceland Did” ~ Mish

French banks pulling back on Asia trade credit ~ FT Alphaville

Greece tourism down 12.5%, Germans go from 15% of bookings to 3% ekathimeriniofficials must be thinking devaluation would help

An Imperfect Union: Europe’s debt crisis ~ 60 minutes - Greeks reminisce over German occupation

France has Little Time ~ Ambrose Pritchard - 35 hour work week, 20% less competitive than Germany

Singapore Housing Market Boom ~ hedged.biz

Financials and Property issues account for approx. 50% of the Hong Kong and Australian stock indices ~ Trading Floor

Marc Faber on Gold ~ Hard Asset Investor$GLD

Research:

Conditional Probabilities Between Hedge Fund Returns & Equity Returns ~ Market Folly

  • Since 2008: when equities are down, odds a hedge fund’s is down equals 81%, when equities are up, its 4%

Interbank option volatilities ~ essentialFX

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