Off the Cuff

In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish get things back in gear to talk about:

• Europe
  • Just went from ‘worse’ to ‘worser.’ To the tune of one trillion euros.
• Derivative Risk
  
  • Why we should be extremely concerned by the $100+ trillion in outstanding derivative contracts
• Market Exuberance
  
  • How can markets justify powering higher given such dire risks to the global economy?

It’s a new year, but Europe’s problems haven’t changed. In fact, they’re getting larger and more urgent. Greece is already in default, though no one is willing to call it that yet, and Portugal is almost certainly next. And while this should be of extreme concern to our European readers, it has a very good potential to trigger a cascading failure that could cause global markets to seize. So everyone has a stake in how this unfolds.

In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish kick the new year off discussing:

• Europe
  • The backstabbing begins among Eurozone members.
• Oil
  • The risk of even higher prices just got a lot worse.
• The Aftermath
  
  • What are the most probable economic outcomes at this stage?

The new year is already off to a rocky start, with protectionist squabbling in Europe and growing threats of an oil embargo with Iran. Those hoping 2012 will usher in any kind of economic recovery had better start hedging their bets.

In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish dig into:

• Europe
  • Developments are happening quickly after last week’s liquidity flood.
• The US
  • Will it continue to outperform in 2012?
• Forecasts for 2012
  • Which factors are most likely to influence events next year?

This is *not* your typical sleepy end to the year. Market developments are happening at a fast and furious pace, especially over in Europe. This week, Mish and Chris seek to sift through all the dust in the air and predict what is going to matter most in the coming year. It’s important to note that of what could happen in 2012, the vast majority of the probable outcomes are weighted to the downside. So make sure you’re starting off the new year with a good defensive plan in place.

In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish chat about:

• The ECB’s Latest Liquidity Move
  • What impact will the recent flood of hundreds of billions of euros have on the European debt crisis?
• Counterparty Risk
  • MF Global’s actions and the government’s reaction to them are eroding critical trust in the system
• Housing Prices
  • Does the recent admission by the NAR that it has been overstating housing values provide any signal that we’re getting close to a market capitulation?

This week’s theme is hidden risk. It’s everywhere. The only thing keeping the financial system together right now is people’s confidence in it. As more and more people realize that banks are being subsidized at taxpayer expense, client assets can be confiscated without notice, and the ‘experts’ guiding us have been wildly wrong for years, this critical confidence may wane to a point where there’s not enough left to keep the system from seizing.

In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish discuss:

• Where to now?
  • There’s a whiff of deflation in the air as central banks posture and pontificate. Is this a harbinger of things to come, or a head-fake before the money printing resumes in earnest?
• Gold
  • It’s been a rough few weeks for holders of the yellow metal. Has there been any fundamental shift affecting the reasons for holding gold?

Cross-currents and volatility define the period we’re in now. For investors, vigilance and defense should be the main priorities. But, it seems we’re closer to the end of this stage than the beginning, so be positioned for action soon.

In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish debate:

• Rescuing Europe
  • There seems little reason to have optimism that the latest announcement of a plan to save the Continent will be any more fruitful than the many previous ones. A better question is: Can Europe be saved?
• Fuzzy numbers
  • Reports of Cyber Monday record sales and lowering unemployment are in the media. Time to break out the champagne?

The leaders of Europe are showing Herculean talent in kicking the can further down the road. The key question now is when does the road end?

In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish chew on:

• Central bank liquidity
  
  • The ECB, the Fed, the Banks of England, Japan, and others turn on spigot, and the stock market throws a party. Will this actually help the situation at all? 
• Endgame options for dealing with all the debt
  
  • 2008-style red flags are increasing. What risk is the banking system facing at this point?
• “Banker to the world”
  
  • The Fed’s new name 

Yesterday saw lots of central bank intervention to provide liquidity. Rather than a cause for celebration, this should be a big cause for worry — but don’t tell that to the equity markets, which rocketed higher on the news (the bond market seems unfazed at this point).

In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish pontificate on:

• The Options for Greece
  
  • Which path should Greece choose at this point? Whichever one it is, it’s not going to feel good.
• Weakness in the Banks
  • 2008-style red flags are increasing. What risk is the banking system facing at this point?
• The promise of China and the Emerging Markets
  
  • More signs of Asian slowdown continue to appear.  

With the US Thanksgiving holiday upon us, Chris and Mish discuss the latest concerning data on the European credit crisis, and give particular thanks that they are not the one’s faced with the choices confronting Greece. There are a limited number of options left on the table this time (austerity; high/hyperinflation; outright default); none of them have pleasant repercussions to live through.

In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish investigate:

• Europe’s precarious plight
  
  • It’s all in the hands of the ECB at this point. Will it print? And if so, will it print enough to matter?
• Corporations and The Stock Market
  • Are malinvestments on the rise?
• The Congressional Supercommittee
  • Will it deliver a plan of any meaning by the approaching deadline? 

Chris has just returned from Spain and is amazed at how serene the scene remains there despite the severe deterioration of the European economy over the past several weeks. Mish concurs that a major ‘wake up call’ to the status quo is coming in the near term.

In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish cover:

• Yesterday’s Market Carnage
  
  • Are we seeing an important shift in investor sentiment?
• The Future of Europe
  • Can the Eurozone remain intact? If not, what does that mean?
• How This Will End
  • Deflation or currency collapse? (or both?)
  • Where should investors looking to preserve purchasing power put their capital?

Chris and Mish have been amazed at how the equity markets have continued to levitate of late, given the absolutely horrible news over the past few weeks. Well, wonder no more. Blow-out spreads in European bond markets and today’s equity market carnage are a wake-up call that — finally — investors are starting to appreciate the unsustainability of the system.