Tuesday, July 12, 2011

Domino Tuesday- Italy Flashes Big Red Help Sign as Contagion Spreads Rapidly; China and ECB Buyers of Only Resort, Again, Fail; Greece Will Officially Default, Concedes Officials; Bond Yields Explode; Cisco to Now Cut 10k Jobs; Record U.S. Deficit; New Levels of Insanity as Insiders Sell at Incredible Pace; Russia's Putin Calls U.S. "Holligans" For Reckless Fiat Printing; Cost to Minnesota Shutdown Incalculable; Severe Drought Grips 14 States While Floods Grip 7; Banks New Business - Slumlording; Volcano in Chile Continues to Spew Ash; Fukushima, and Lots of it; Much More

Update 1: Oopsie! We told you so and just now the MSM catches on. "High levels of radiation found in rainwater across Northwest USA." Might as well let the cat out of the bag now.

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In the blink of an eye, or a radioactive flash from Fukushima, Italy moves from the back of everyone's mind to the forefront - with a big red flashing neon HELP! sign to remind you like Jack Nicholson in The Shining, "Heeeere's Johnny!"

Over the past year, Italy has been relatively quiet - so much so that in many economic reports, many authors chose to leave the extra "I" in PIIGS out of the acronym and just call them the PIGS. However, Italy has not for a single moment left our sight and we have more recently been warning to keep a close eye on Italy and Spain in the coming weeks as contagion was already spreading and infecting Italian and Spanish bonds. Lest we forget, Italian banks, as we warned about, are overexposed to Greece - and Portugal - and Ireland - and Belgium. Oops.

We have to wonder if those bond holders just now discovered that Italy is insolvent because the cast of Jersey Whore is in Rome, and Snookie (who happens to be a financial expert and world renowned economist with a PhD in global finance), made a public service announcement. On breaking news that Snookie (and her crew of fellow experts) said Italy is an "insolvent sovereign on the verge of collapse," Italian bonds skyrocketed. The 10yr exploded to over 6%, only to later fall on news that China and the ECB were buyers in the secondary markets (where have we seen this before) and that OJ Simpson congratulated Casey Anthony for a good acting job after she was set free once again, the EU is saved. Ok, maybe we're going a bit far here, but insolvent is insolvent and all the PIIGS are insolvent. It goes without saying Hu's who's next to taste the bitter bite of fiat currency. What will happen when the FM of Italy resigns?

All that this latest drama has proven (besides the fact that the whole world is run by imbeciles) is that Italy is the third EU member that officially will require a bailout. Greece and Ireland are already basket cases held hostage by banksters and officially will be forced to accept bailouts (this despite rumors that Greece will officially default before the European Stability Mechanism goes into action in 2013. For now, it's Italy's turn to burn. Simply by examining the bond yields, we see Portugal is a given organ donor bailout insolvent nation, and that contagion will next spread to Spain as the 10yr Spanish bond, as we predicted, has gone well over 6%.

Keep in mind, 7% (on the 10yr) is the EU's unofficial threshold maximum and once a member reaches that level, it's lights out. Look at Greece. Look at Portugal. Look at Ireland. Now look at Spain and Italy. See the big picture?

Moving on to the U.S. we find some big news coming out today including but not limited to 1) Cisco Systems could cut not 2k, not 5k but now 10k workers, 2) a record U.S. trade deficit, 3) and new insanity in insider buying.

Let's briefly examine each. First, the news about Cisco cutting 10k employees should come as no surprise to readers of Fiat's Fire. We have been warning that as the economy continues to sink into the mire, these big corporations will be defending profit and margins at all costs. If they could replace all workers with robots, they would. It also is telling because it signals that the economy is slowing if demand for high tech products is slowing. So much for a jobless recovery. Our advice to corporate pigs - enjoy it while you can.

Second, the trade deficit exploded to $50.2 Billion as the price of oil imports jumped to the highest since 2008, which simply means Wall Street's finest were once again way off the mark as they guesstimated a deficit of $44.0 Billion. How anyone thinks this is even remotely sustainable is beyond all logic and reasoning. As this deficit grows larger and larger, we have to wonder if America's corporations even care. We have an idea - they care as much about you as you care about what socks Justin Bieber is wearing today. Very short sighted of corporate America, and once again, they deserve what is coming.

Thirdly, our favorite talking point - how blatantly disgusting it is to see insiders of companies sell their shares at breakneck speed while talking about how wonderful the future is. Not 3 years ago, if the insider selling to buying was above 30:1, it would be a warning sign to "the markets" that something bad was on the way. Last week's ratio, in line with the average, was 3,700:1. That is three thousand seven hundred to one. Oops. Again, if anyone needed any more proof that the entire financial system is set to implode, this is it. For once, we agree with Russia's Putin when he branded the U.S. as "hooligans" for their reckless printing. No, you can't make this stuff up.

Moving on to more economically bullish news, we learn that Minnesota's shutdown will cause damage to the Minnesota economy that "will be real, significant -- and incalculable." Almost no mention of this in the 10 o'clock news or anywhere else. Nevertheless, this story will be spun into something bullish for the economy and it should be worth another 300 points on the Dow(n) Jones Crap Index.

Across the U.S. a severe drought has gripped the nation and engulfing now 14 states in an emergency. No rain, means no crops. No crops, means no money for farmers and much higher prices at the supermarkets. Definitely bullish news for the economy and your wallet.

While 14 states are in a drought emergency, at least 7 states are in a flood emergency which is being called "the worst flooding in U.S. history." We're 100% Bernanke certain that all those people can't wait to go out and spend their welfare checks on iPads and iPhones while they wait for the water to recede. This alone should be worth 400-2500 points on the Dow(n) Jones Crap Index. Put your rally hats on. See, we also can be bullish like Wall Street's finest.

Of course, nothing is more bullish for the economy than what the Too Big To Fail and Too Corrupt To Save banks are doing. We give them kudos for diversifying into other business areas with their latest venture into "slumlording." Yes, not only are banks looking and finding ways to rape your wallet and earn bigger bonuses, they are now in the business of slumlording. All in the name of "profit." This is worth 330 points for the markets.

Around the world, nothing is more bullish for the economy than catastrophes and in Chile, the ongoing crisis caused by the Puyehue volcano is the second most bullish of them all - grounding hundreds of flights over the past two weeks alone, shutting down 80k square miles of farm land, closing up businesses across 4 countries, and covering thousands of miles in 2 foot deep healthy-for-you ash. It's all good for the global economy though. Just like Fukushima is proving to be.

- Healthy radioactive meat circulating around Japan. Hat tip to Ann Coulter for pointing out the health benefits of eating radiation.

- Healthy, freshly collected ash containing 70,000+ bq/kg of radioactive material found near Tokyo. Thank you PM Kan for letting hundreds of thousands of people return to this healthy ash area.

- Cover ups of healthy radiation in the U.S. The U.S. is just as good at covering up as Japan.

So what choice does the average Joe have but to buy gold and silver and prepare for the coming complete collapse of the global house of cards? You do the math. Connect the dots. Stay awake to the developments around the world. Question everything. Stay healthy.


  1. everytime I think I've completely swallowed the red pill you manage to make me realize its not down all the way just yet

  2. @Anon- Sorry about that. I do have some good news though - mathematically speaking, the global economic gas tank will be out of gas by late fall. Which means, limitless fiat printing and soaring gold/silver prices. You know what that means.

  3. Gold prices already seem to be getting a head start. The last couple hours have been interesting.

  4. not even remotely concerned about gold and silver. I'm figuring a die off of 70 to 1. The question is the timespan that it occurs in and the mechanisms of death.

  5. The more serious still is the lack of maps of the radiation emanating from Fukushima. Why this censorship of maps on the continual movement of radioactivity ? Here, it's like the chemtrails and their compositions. They hide something ! Something that is serious and they dare step say !

  6. @Umdesch4- As I said since day one, the daily fluctuations in gold/silver prices mean nothing in the long term. Higher she blows.

    @huemaurice- Try this - http://enenews.com/radiation-data-from-seattle-area-survey-may-be-withheld-by-feds-for-national-security-purposes

    Withheld for "national security purposes." In other words, if they let the people know what was in the air, there would be total chaos.

  7. @Hue- Check out update 1. When the MSM starts to release info like this, it can't be far off. Stay safe.

  8. As a sovereign nation, why does it matter whether Greece is allowed to default or not? If they want to, they could pull an Iceland or more. They just need to be ready for war (if that's even a possibility) More likely is a global collapse like we're hearing here.