Germany says does not rule out IMF aid for Greece

"We remain confident that Greece's consolidation efforts will be successful," spokesman Ulrich Wilhelm told a regular government news conference, adding: "The signals from the capital markets have been encouraging that it's succeeding."

Wilhelm added: "The German government does not rule out IMF support." He said there was still no final decision in the German government on that question.

No one can make a decision or commit because the solution opens a can of worms beyond the bailout Greece. If they throw money at Greece, then the other club med countries within the EU (Spain, Italy, Portugal, etc) stand in line behind them. One goes, they all go, and that means printing money. They can't simply kick them out for breaking the rules, because other larger EU members have done the same.

The Central Banker of central banks, IMF, to the rescue because it might offer an off-the-balance sheet solution.

Those that suggest the US Union is different have not followed the news flow depicting huge deifict holes at the local, municipal, and State levels.

Source: reuters.com

The Battle Between Illusion and Reality: Nominal vs Real Gains

Explosive rally since 2009

S&P 500 ETF (SPY):


Turns anemic when adjusted for fiat devaluation

S&P 500 to Gold Ratio (SPYGLDR):


Expect the 1990 resistance to hold - about 1.125. This implies that further rise in stocks at this level will be exceeded by gains in gold. This is a concept is almost always missed or omitted by the media. This is illusion of devaluation - not talking about the devaluation in terms of the U.S. dollar index as quoted by the media as dollar strength or weakness but rather gold. Fiat versus hard money without liability.

The battle of perception requires a rising stock market. A rising stock market implies an improving economic environment. Be cautious of this argument, as it will be presented often by the media. Rising stock prices can be a direct result of devaluation of fiat money against gold. This comes straight from the central planners "how to manage a depression" playbook.

China tells Washington to cool yuan pressure

China is sending a Cabinet official to Washington in a bid to defuse trade tensions, the government said Friday, as it called on U.S. leaders to cool the "politicization and emotionalization" of a currency dispute.

More of "It is our dollar but your problem." China will not be pushed to act in America's best interests. As longs as they can continue to "diversify" through cash and Treasury-backed loan acquisitions, there is little incentive for them to revalue.

Source: finance.yahoo.com

Defaults Soar as Foreclosures Slide in Sunny California: Foreclosure Radar

“The disconnect between delinquencies, and foreclosure sales continues to widen,” says Sean O’Toole, Founder and CEO of ForeclosureRadar.com. “While efforts to slow foreclosures are clearly working, it remains unclear that anything has yet addressed the core problem of excess household mortgage debt.”

Try not to get caught up in the denial.

Source: housingwire.com

Florida courts choking with foreclosure cases

State courts are taking brand new action to try and alleviate the chokehold that foreclosures are causing and keeping everyone's property values down.

Big disconnect between the illusion and reality.

Source: wptv.com

Financial Sector

The strength of any chain is always defined by its weakest link. The financial sector is by far the weakest link within the stock market chain. The 2003, 2002 and 1998 lows on Bank stock Index (BKX) were broken on increased volume in 2008. This is known as a technical sign of strength. Support broken with force tends to become resistance. While the bank stocks have rallied with the stock market, they have lagged other sectors. Financials, the engine of the US paper machine, need to be the leaders.

The characteristics of a rising wedge, the light volume and converging price, are not difficult to notice as the BKX approaches 60.

While the state of affairs in US, as presented by the media, remains tilted toward denial of the dire financial (credit) and economic conditions, it does not suggest that the markets remain completely oblivious. Unfortunately, this bias, designed to "protect" the public, will only serve to hurt them again when reality breaks perception.

Bank Stocks (BKX):

Banks with the highest levels of troubled loans

Source: msnbc.msn.com