Prime Minister Alan Schwartz ~ The Risk Averse Alert

Thursday, December 02, 2010

Prime Minister Alan Schwartz

My, what perfect Spanish Alan Schwartz speaks!

Well, with CNBC on the case "verifying" (wink wink) all is well in Spain we must be about a day or two away from some systemically threatening collapse. Whether the unreported freeze-up of the European corporate bond market has anything to do with the Axis of Fraud's apparent targeting of Spain remains to be seen. Could an attempt to orchestrate a mega bailout in such a way as skirts all political roadblocks be in the works? After all, there is enough reason to believe the so-called "memorandum of understanding" between Ireland and the EU will amount to a complete waste of time. Surely, too, the lesson of 2008 was that a great swindle requires a crisis of seemingly incredible dimensions. The Spanish banking system could offer all the right ingredients.

Still in doubt, though, is whether JP Morgan Chase will have any place for grabbing European assets on the cheap to cover its swollen derivatives book now that the firm has a $6.4 billion lawsuit hanging over its head, charged today with enabling Bernie Madoff's swindle for over twenty years. As if their foreclosure fraud problem wasn't enough! One can only imagine what sickening sweet TV commercial the firm might create in order to sugar coat this one.

You would think the rottenness of the global financial system might be better left to stand on its own, yet Goldman Sachs was compelled today to raise its rating on financials to "overweight." Just like that should surprise evaporate upon learning that, Goldman Sachs was a large recipient of Fed largess in 2008 and 2009!

Meanwhile at the ETF-laden NYSE (the rally leader these past two days)...


Relative strength remains weak and momentum's fade has yet to be reversed. This really is no surprise, though, given remarkably poor upside participation...


The NYSE Composite is trading higher now than at mid-October ... mid-September ... and early-August. Yet in the one-way market of the past two days not enough interest could be generated to send a widening swath of NYSE-listed issues to new 52-week highs. This is a bad sign.

NYSE McClellan

More bad signs from McClellan Oscillator related measures. The situation now appears even more precarious than was the case in late-April. Collapse could be imminent.

Fast Money
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