Morning Audibles 3.23.10 - Let's Do The 'Scooby Doo' Ending!

Kathimerini reports that the state-owned Hellenic Post Bank (TT), a firm that operates about 2 blocks away from the parliament building in Athens, held 15%, or ($1.2 billion), of the total $8 billion in Greek notional CDS bought $1.2 billion of Greek CDS at 135 bps in August 2009 and sold them at 235 bps in December at 235 bps, making a profit of €35 million.


http://www.ekathimerini.com/4dcgi/_w_articles_economy_0_22/03/2010_115787

Break out the 'Scooby Snacks'! You know... While CV could get all wide eyed and frenzied about this, instead, it just makes me realize how much it appears that the global circus that has become politics and capital markets is not something you want to stand against unless you have a great deal of patience, and/or ignorance.


I think Warren Buffett said "There's never one cockroach in the kitchen" (he should know right)?. You have to just wonder if Bernanke, the FED, the Squid, or Saint Jamie aren't making the same bets on US sovereign debt (while handing "the anointed one" the credit card). Will anyone ever show up to fix the problem? I doubt it. Is anyone in Washington smart enough to even know (or care)? Probably not!

So once again, my friends, "It's BUG BETTING time". First bug to enter the roach motel wins $5, place your bet on your bug. SPX, where to all you "long" bug betters? 1200? 1300? For today, existing homes sales comes out at 10AM. Will it be lousy? Probably! Will the markets care (or care about Greek CDS)? Probably not!


If you're unclear, let me explain to you how capital markets work. Here's the basic situation in housing.

The graph clearly shows that despite the present backlog of inventory and foreclosed homes on the market, the situation is about to get A LOT worse (as the next two years will bring the largest tsunami of option ARM resets). Basically, those just barely hanging on, are about to join the perma-delinquent masses. But as we all know, "when the going gets tough, the tough go shopping"! (Macy's working on a 4 bagger in the past 12 months, and up over 45% in the past month).

Roosevelt was famous for the line "you have nothing to fear, but fear itself". The present guy, ever the pragmatist, and likening himself to Roosevelt, basically decided to shorten that mantra. Today, it's simply "you have nothing to fear...", period... Don't pay your mortgages, & don't worry about any resets. That's the message. We hold all the power, so we'll just pass laws that let you stay in your houses, or just put the bad loans on our own credit card. When the bill comes due, we'll just tear it up (well actually, I'll be OUTTA HERE by then so it won't be my problem - where will I be, you ask? - Probably off on my own private island that these nice cockroaches campaign financiers will have bought for me using the profits from the CDS's they bought on the sovereign debt of the US).


While I'm at it, I think I'll send wifey and the kids off to New York to do a little Easter shopping and start getting provisions for the island. While it's probably beneath my high standards to do so, I'll tell 'em to stop by Macy's and grab a few photo-ops with the hoi polloi...


The last time I checked, "The Mystery Machine" was only a 70's van (not a boat)... I ought to be safe on my island...