Sep 25

Winter comes early to Salzburg:

Snow drifts up to two meters (almost seven feet) high.

24 Sep 2015 – After a summer of record high temperatures winter has already arrived in some parts of Austria – with snowfall forcing closure of the Grossglockner alpine road in the state of Salzburg.

“We’ve had 50 centimetres (20 inches) of snow. Between the Fuscher Törl and the Hochtor, there are snow drifts of up to two meters,” deputy police superintendent Peter Embacher said. Continue reading »

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Dec 12

Austrian Civil Servant Blows $440 Million In Taxpayer Funds On Risky Derivatives (ZeroHedge, Dec 11, 2012):

It is oddly ironic that on the day the US bailout of AIG is complete, and with a “profit” at that, the spin goes, even if the spin ignores that the “profit” was only purchased at the expense of trillions in sovereign debt issuance and near immediate monetization by the Fed, which has onboarded a mindbogling amount of duration risk (from under $500MM in DV01 in 2008 to over $2.5 billion currently, but nobody will discuss this issue as few if any grasp just how much risk exposure the Fed has shifted away from entities such as AIG), that we learn just how far the abuse of virtually free taxpayer funds goes. Only instead of some US government apparatchiks blowing through billions in some concrete government building in downtown D.C., we go to the birthplace of Mozart, in Salzburg, Austria to learn that a civil servant gambled hundreds of millions of euros of taxpayers’ money on high-risk derivatives.”

While this is merely one incident in a faraway land, what it does show is that in an environment in which cheap money is handed out loosely by the government (of which the US government is most guilty) the opportunity cost for prudent, fiducariy responsibility is very low, and it is only a matter of time before the new normal moral hazard rears its ugly head, as one after another more such incidents will come to light. And just like housing could never go down in the credit bubble years, so the Fed is perceived as infallible in the current latest, greatest and luckily final, peak bubble. Just like housing, the Fed is infallible until it fails. Continue reading »

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