– Waiting For “Magic” Is Now An Investing Strategy (ZeroHedge, Feb. 3, 2012):
It has long been known that under central planning “Hope” (that Bernanke sees the printer’s shadow; that the economy implodes so Bernanke can print; that the economy surges so that Bernanke can still print; that Brian Sack fat fingers in a few million extra shares of NFLX, speaking of which the Fed’s Other Assets are now $160 billion) is one of the dominant investment strategies. To this roster of unorthodox investment practices, we can now add magic. Because when analyzing the capital shortfall at Deutsche Bank (whose assets are 84% of German GDP), arguably the bank with most to lose when Europe is gripped by out of control default contagion (right after Allianz and Generali, or A&G, of course), Credit Sights makes the following observation: “The capital shortfall of €3.2 bln identified by the EBA’s capital exercise at 30 September 2011 has magically disappeared… This illustrates the capacity of banks to improve capital ratios without raising new capital.” We agree:expecting nothing short of magic is by far the best means to achieve the €21 trillion in deleveraging needed to make the world viable from a solvency standpoint, forget about growing. As for “magic” as an (inverse) bailout strategy, surely this opens up unlimited potential untapped avenues of value uncreation – just consider the endless opportunities of “magically vaporized” as an official explanation for what will happen to your money when this latest Ponzi bubble bursts…
Full blurb from Credit Sights:
