Numbahs 3/18/13

R=

1558.40, 1563.10 Fuhgeddaboudid.

Line in the Sand:

1553.80

S= 1549.10, 1544.50, 1542.50, 1522.90 (~20 Day; Id hang my hat somewhere in here and see how they react; they always pay homage to the 20-day, right?) If not, then note these: 1516.40, 1497.50 ******** Hotter than hot stuff, eh? Unthinkable even. Cyprus. There is an FOMC meeting this week. Can you imagine the fancy footwork that The Bernank and Professor Emerita Yellen are doin in light of the nuclear depth bomb that the financial leaders of Europe just dropped on the whole freakin system? Right. It works like a depth charge but implements a nuclear war head. For emphasis. Resulting shock/crippling is massive. Take the visual. And you thought that these weapons of mass destruction had been retired from use 20 years ago, right? Well, honey, they just rolled em out again over the weekend. Note that the beauty of usin em again is that they are far less accurate than the more modernized weapons available today. Therefore, ya just dont know whats gonna take part of the hit. Copy? Ill bet you do. And thats why theyre scramblin this mornin. Meanwhile, I remain stunned, evidence that the shock waves made it further than they planned. How you feelin, eh? A little woozy, maybe?

The next thing that comes to an inquiring mind: just what is the highly sophisticated, superintelligent scheme of which this nuclear depth bomb is just the beginning? You know. You try to assume that they dropped it, knowing it would nebulize world markets/confidence. But in the longer-term, brilliant scheme of things, will prove in retrospect to have been a stroke of genius. Is that the scan that your brain ran immediately? Likely triggered by unwillingness to accept such horrendous stupidity? Thats what mine did. Right away. Based on the knee-jerk thought that the financial stewards of any sovereign(s) just cannot be this egregiously ignorant. Thus, the mind suspects, there must be some bigger, extremely intricate, stellar plan in motion. Well, guess what? Sorry to burst any hopeful delusion, but what you see is what you get, unfortunately. They did it. They did the unthinkable. Next thought: Is this purely stupidity or is it tinged with desperation, i.e., was this the only remedy they could possibly muster in light of prior action? Read: is this the only arrow left in the quiver? So many unanswered questions, so little time! Unfathomable audacity? You be the judge: The EFSF is the bail-out slush fund, blah, blah, blah. You know this drill. The important point we wish to make this morning is that it was signed by 27 members. All of whom agreed to contribute. Spain for example, guaranteed 5.2 bil Euros. Greece guaranteed 1.2 bil and Italy, 7.9 bil. Tiny Cyprus, believe it or not, is on the roster as well. With a contribution of just under a billion Euros. Please note that the contributions are not limited simply to the numbers on the list. But it was also agreed that when the EFSF issues bonds, that the members will likewise be responsible for the interest payments on a pro-rated basis. So even if their guarantee was relatively minuscule, Cyprus was still numbered as a contributing factor. Then over the weekend, the European honchos gave em a hot-lead enema. Dirty Russian money (which apparently is parked there 24:7) aside, is this any way to treat a partner? Even a junior partner? Good grief! Okay. Those are the usual thoughts.

And besides the visual of The Bernank having his secretary send out for a double order of Depends for the upcoming convocation, is there anything else to consider? Only if you have dark thoughts as I do, continue along: Having pondered this pile of manure since hearing about it. And having shaken my head until I gave myself a migraine, the following: The load of crap these bums just dropped on Cyprus backed by Charles Aznavour look-alike, Christine Lagarde and her merry IMF no less is absolutely the best illustration we as global investors could possibly ever hope for. Tell you why. The Cypriot banks screwed the pooch. Big time. Please allow me to remind you that most of the Cypriot problem arises from their exposure to Greek sovereign debt. Further, you probably also need reminding that Cypriot Banks used to be known as pretty conservative. They did not get heavily involved with Greek debt until a couple or three years ago. Probably because in what was then the Eleventh Hour, they were trying to participate in support for the Greek economy upon which they rely heavily for their own sustenance. Thats how they screwed the pooch. They jumped in to help Greece in 2010 with a view towards helping facilitate their own survival. Okay, so the partys over. And the European skanks then decide to take money from depositors in the Cypress banks to fund the bailout. Right. Depending upon which level of saver you are tiny to whopper you will be robbed on a sliding scale of X percent of your money. Bang. Zoom. Billy club over the head. The European Union rolls you right there in the alley way and takes your wallet, your credit cards and either your Timex or your Rolex. They are not discriminating. If you can get over your horror and disgust with the European leadership, then consider this: They just doled out an instant reality check for the depositors of Cypress. Read: your financial system is about to collapse. We are not going to point any fingers. Were just comin in here and you guys are gonna pay up front. Right this freakin minute. And well let the economichardship chips fall where they may. Suck it up. In my darkened mind, this is humane. Compare, please, to how The Bernank et al have handled our own bail-out. They have taken a tack to prohibit the clearing of prices, opting instead to reflate. The m.o. is monetization of the

debt and a deliberate debauching of the US dollar. So effectively, the FED has robbed every US saver and more extensively, every American who receives a paycheck the same way the EU seeks now to rob the Cypriots. The difference? The FED operates stealthily and circuitously, counting on the oblivion of most Americans; they are correct in this assessment. They have been mugging us with ease for 4+ years. And are creating more bubbles in the process. Which, ultimately will be broken, starting the boom/bust clock all over again. So if you ask me, the Cypriots got off easy. They got a direct hit. They can count their losses with a cheap pocket calculator, rail against the powers-that-be and then move on. We the People have no such luxury. The whole damn lot of the global financial stewards, the FED being the most culpable, aint worth the gun powder to blow em all to hell. Any questions? Good. Mind the Numbahs. They will lick their wounds but then ultimately interpret this Cypriot massacre as a further obstacle to the FEDs inclination to shut the pump off any time soon. Giddyap! Joan McCullough, East Shore Partners, 1-212-226-1223 Trading: 1-800-222-8723 joanmccullough@eastshorepartners.com
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