Europe Still Very Dead ~ The Risk Averse Alert

Monday, July 02, 2012

Europe Still Very Dead

The ad strip to the left appeared today on Check out the middle ad. Too funny! Apparently Kimberly Clark believes its stock price is worth the kind of protection put options soon might not be able to provide. Truly, it is only a matter of time before shareholders of all kinds are left crapping their pants. Everything whose value hinges on a dead financial system remains captive to lenders of last resort still hopelessly trapped. Write this down: Europe is dead.

Germany could acquiesce to turning the ESM into a bad bank, allowing this so-called bailout fund to be levered up even beyond the Geithner Minimum ($2 trillion), and still Europe would be dead. Any attempt to leverage the European banking system's insolvent garbage is sure to have an earth-shattering effect on credit markets made only the more aware with each new crisis that, the greater bulk of still-growing, outstanding debts never will be repaid (at least not in 2012 dollars). Rates in all probability will only go through the roof from here.

The ECB, the Fed, along with the Banks of England, Japan and China could jointly make worthy collateral out of every nickel of future debt anticipated over the next fifteen centuries (let alone all the insolvent junk today dragging down a banking system stuffed to the gills with the fruits of Ponzi finance produced over the past forty years), and credit market confidence only more quickly would evaporate absent hooks set deeper into corresponding national treasuries. Yet not even holding taxpayers still more captive will prove beneficial and lasting. Quite the opposite! Hyperinflationary breakdown will only accelerate more rapidly.

Anyone thinking the claimed Team Fraud victory at last week's European "leaders" summit somehow provides a positive boost to confidence enough to reverse an increasingly desperate solvency dilemma, and so, poise the market for a moonshot, simply is lost in a dream no doubt amply fed over the past few years, but now no longer sustainable. The addition of yet another opaque layer of still more mis-priced debt finds absent a substantial wealth font to leverage, this effectively securing debt's value. Everything has been tapped, and then some.

Finally, last week's agreement effectively subordinating outstanding European liabilities, both public and private, only but further clouds the transparency of already positively overwhelmed sovereigns right to the trans-Atlantic's core. This circumstance likely in no time will have no less an undesired, negative impact on credit markets, where garbage of old perpetually requiring rollover at increasingly favorable terms from now until forever will become ever more costly to bury.

The days of pretending a massive mountain of debt possesses any credible backstop are over. The trans-Atlantic is finished. But hours, maybe, have been bought with a wink and a promise whose accompanying smile in all likelihood was entirely devious. In truth there is no shortage of immediate circumstance existing to sabotage a yet-to-be-funded permanent bailout mechanism sidestepping sovereigns. Yet even if the supra-national bank pig flies, insolvency currently wracking Europe will only grow worse, as this course is the only way in which a flying, fascist pig has any hope at all of gaining the power it seeks.

Fast Money
* * * * *

© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

There's an easy way to boost your investment discipline...

Get Real-Time Trade Notification!